Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

PORT OF LONDON BILL

Read the Third time and passed.

WELSH SHIPPING AGENCY BILL [Lords] (By Order)

Second Reading deferred till Thursday.

MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (SHOREHAM AND LANCING) BILL

PIER AND HARBOUR PROVISIONAL
ORDER (BIDEFORD HARBOUR) BILL

PIER AND HARBOUR PROVISIONAL
ORDER (KING'S LYNN CONSERVANCY) BILL

Read a Second time and committed.

Oral Answers to Questions — HOUSING

Controlled Tenancies

Mr. Parkin: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what study he has made of the formula approved by Westminster City Council for transferring the rights of controlled tenants when they are asked to move to permit redevelopment, a copy of which has been sent to him; and whether he will recommend to all local authorities its adoption as a standard form in rent books of controlled tenancies in order to prevent the method whereby tenants are told that, to make room for redevelopment, their controlled tenancies will cease.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph): I have seen the specimen agreement referred to by the hon. Member. Whilst I welcome the help such agreements may give, I would

strongly recommend anyone transferring from a controlled tenancy to other accommodation in such circumstances to get expert advice on his individual case. I propose to require that a recommendation to this effect should be inserted in all rent books for controlled tenancies.

Mr. Parkin: Is the Minister aware how much satisfaction that reply gives to me personally, as it will, I am sure, in all parts of the House? Will he see that the widest publicity is given to this and that there is the widest adoption of this principle, because the adoption of this device would make much easier the mobility which, we know, is required if under-occupied and under-equipped dwellings are to be exchanged for others to permit of their restoration?

Sir K. Joseph: I welcome all publicity for the need of controlled tenants to take advice before thinking of leaving their controlled tenancy.

Mr. Parkin: asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware that persons are being persuaded to leave their controlled tenancies on the supposition that they are signing standard leases for new accommodation, which are actually receipts for surrender of their tenancies; and if he will introduce legislation this Session to give protection to such persons.

Sir K. Joseph: I am aware that in one way or another, sometimes resembling the method stated, tenants are occasionally tricked into moving from controlled properties. There is no easy way of making sure that people avail themselves of the protection which the law affords them, but when the Milner Holland Report is available the Government will act to provide any further protection which is shown to be necessary and effective.

Mr. Parkin: Is the Minister aware that what I shall continue to describe as chicanery and fraud is often upheld as one of the most important guiding principles of good estate management on the ground that a person should keep his property unencumbered and give as little security as possible, so that if he wants to raise money from the bank he will be able to give a valuation as


with vacant possession, which entitles him to a greater loan than he could otherwise get? When considering all aspects of this matter, will the Minister consider inviting, perhaps, the banks or providing, as he once did, through building societies special loans for those who are prepared to pledge fully-tenanted secured properties in return for loans?

Standard Grants

Mr. Frank Allaun: asked the Minister of Housing and Local Government and Minister for Welsh Affairs how many houses were improved with standard grants in the last 12 months to a convenient date by installing baths or inside lavatories; how many of these were made to private landlords and owner-occupiers, respectively; and if, in view of the fact that almost four million households are revealed by the census in England, Scotland and Wales as being without a bath, he is satisfied with this rate of progress.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. F. V. Corfield): Of 38,500 baths and 43,600 water closets installed with the help of standard grants in the 12 months to 31st March last. 37,000 baths and 41,000 water closets were in privately owned houses. My right hon. Friend cannot say how many of these were owner-occupied and how many were let; but it is likely that some three-quarters were owner-occupied. Much progress has been made in modernising our older houses. For example, the 1961 census returns showed that 3½ million more households had the exclusive use of a fixed bath than in 1951. But my right hon. Friend wants to see faster progress, and the new provisions in the Housing Bill will help to this end.

Mr. Allaun: Is the hon. Gentleman aware that these figures show that less than one in four of the applications come from private landlords and that at this rate it will be the next century before many houses are provided with a bath? Is he also aware that many of us do not believe that the Government's new Housing Bill will do the job, and that we feel that the only effective solution is to have area improvement schemes backed by compulsory purchase orders where required?

Mr. Corfield: The hon. Gentleman is fully aware that the Bill provides for area improvement schemes with the necessary degree of compulsion. I would stress that the true test of this progress is the number of houses remaining which are capable of being improved. Only by comparing the rate of improvement against that figure is a true picture obtained.

Mr. Graham Page: Is my hon. Friend aware that to say that only one in four of these applications come from privately let houses is a distortion of the figures, and that very many more houses are being improved without the use of the standard grant? Is it not true that about three times as many are being improved without the grant as with the grant?

Mr. Corfield: My hon. Friend's figures are probably right, but I have no means of checking them [Laughter.] We know that a very large number of houses are being improved without grant. The House should realise that the Question relates purely to standard grants, and that the very much larger number of discretionary grants automatically means that many more houses will have baths at the end of the improvement.

Mrs. Slater: In view of the appalling figures disclosed in the Sunday Times about Aberdeen, does not the hon. Gentleman think that there is a need— [Interruption.] It is no good the Minister shaking his head; the facts were given there. When one in six people are sharing toilets, does not the hon. Gentleman think that even from the point of view of health the Government should put very much greater effort into this scheme than they are doing now?

Mr. Corfield: The hon. Lady knows perfectly well that my right hon. Friend attaches enormous importance to the scheme. She will also be aware that I cannot answer a specific question in relation to Scotland.

House Building

14. Dr. Bray: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what consideration he has given to maintaining


housing starts at such a level as to provide a steady load of work for the different stages of the building industry.

Sir K. Joseph: My right hon. Friend, the Minister of Public Building and Works and I are conscious of the need to maintain a steady demand on the building industry both to create confidence and to secure maximum productivity. I am encouraging local authorities to co-operate in forward planning of their house building programmes and to adopt methods of construction which make the best use of the available labour.

Dr. Bray: Is the right hon. Gentleman aware that the shortage of bricks and some shortage of labour in the finishing trades, together with a possible fall-off in the rate of new orders from local authorities as the backlog is cleared up, are causing a certain amount of unease about the steadiness of future orders to the housing industry? Is he further aware that figures recently published by the Minister of Public Building and Works show a slight fall from January to March in the rate of new housing starts by local public authorities?

Sir K. Joseph: I am aware that in the great jump forward in the quantity of houses under construction this year—a 25 per cent. increase on last year—there are bound to be some strains, but we are likely to get a record number of completions this year.

Mr. Graham Page: Is it not highly satisfactory that the Government, having promised to reach a target of 350,000 houses a year next year, have already started this year between 360,000 and 370,000?

Dr. Bray: Is the right hon. Gentleman aware that this is not a matter of party propaganda on one side or the other? There is a serious problem for the building industry in maintaining a steady level, and this does not seem to be appreciated in his Ministry. Will he look at this more closely?

Sir K. Joseph: It is appreciated in my Ministry that, at the speed we are going, it is important to encourage labour-saving devices and other materials. With the brick industry and others connected with building, my right

hon. Friend the Minister of Public Building and Works is doing all he can to ensure—and is ensuring—that materials keep pace with the greatly increased demand.

Compulsory Purchase Orders

Mr. MacColl: asked the Minister of Housing and Local Government and Minister for Welsh Affairs how many applications he received during the month of May, 1964, for confirmation of compulsory purchase orders to protect occupants of houses, subject to action under the Housing Act, 1961, from intimidation or eviction; and what decisions he has reached.

Sir K. Joseph: During May my Department received two compulsory purchase orders covering houses in respect of which, according to the information submitted, notices had previously been served under Part II of the Act of 1961. Since the authority have not yet given a formal statement of their reasons, I cannot say whether they were made for the precise reason given by the hon. Member. No decision has yet been reached on either order.

Mr. MacColl: Is it not rather a pity that decisions have not been made, if these are vital questions? Is the right hon. Gentleman aware that, in the case about which I corresponded with him, about 42 Sutherland Avenue, Padding-ton, the only results of my correspondence with him were that the services of heat and light were cut off? This is a case in which there is a management order. Is it not monstrous that this kind of barbarous warfare should still be taking place at the expense of young children who are trying to exist in these conditions?

Sir K. Joseph: The compulsory purchase order reached me only ten days ago and the period for objections has not yet expired. I understand that the local authority has been in touch with the landlord. Water was also cut off, but I gather that that has now been reinstated.

Mr. Brockway: Is it not clear that the procedure of the compulsory purchase order is not now adequate for dealing with the problem of evictions? Is the right hon. Gentleman aware that


in Slough, where the average in recent years has been 20 evictions a year, there have been 24 evictions in the first six months of this year? Will he look at this problem and do something to meet it?

Sir K. Joseph: The Government have done something by introducing Clause 68 of the Housing Bill, at present before another place, which will protect tenants during the procedural process of the making of a compulsory purchase order.

Gross National Product (Expenditure)

Mr. Frank Allaun: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what proportion of Great Britain's gross national product was devoted to housing in 1963; and how many houses were built in that year.

Sir K. Joseph: In 1963 the proportion of the gross national product of the United Kingdom devoted to the provision of new housing was just under 3·6 per cent. In Great Britain more than 368,000 dwellings were started and nearly 299,000 dwellings were completed.

Mr. Allaun: Is the right hon. Gentleman aware that, with a slightly smaller population, West Germany builds 570,000 homes year after year, which is no miracle because that country devotes 5·8 per cent. of its national product to this purpose? Cannot the British Government devote an equal proportion to this purpose in our country, as many of us believe that unless 500,000 houses a year are built for the next ten years the tragic housing situation in our country will remain?

Sir K. Joseph: We are raising the housing programme as fast as is practicable. While the hon. Gentleman may hold the opinion that building 500,000 houses a year is practicable, his right hon. Friends have settled upon the same target as the Government.

Mr. Skeet: I wonder whether my right hon. Friend would do me the courtesy of telling me the current percentage for 1964.

Sir K. Joseph: On present estimates, in 1964 about 4 per cent. of the gross national product will be spent on new housing, which is about the same percentage as 1954, when the right hon. Member for

Huyton (Mr. H. Wilson) said that too many houses were being built.

Mr. Graham Page: Is my right hon. Friend aware that the figures given for German housing include many thousands which are built without bathrooms, which ought to concern the hon. Member for Salford, East (Mr. Frank Allaun), and are not comparable with our building at all? Is it not right to put this into its right perspective? Is my right hon. Friend aware that the total proportion of the gross national product spent on social services is 16½ per cent. as against 13 per cent. in 1951?

Sir K. Joseph: All my hon. Friend has said is true, and it shows how difficult it is to compare one slice of the gross national product with one slice of that in another country without looking at all expenditure.

Mr. Allaun: Is the right hon. Gentleman aware, however, that in West Germany the size of homes is going up while under this country's present Government the size of homes is going down?

Sir K. Joseph: It happened in Germany becaue they started off very small.

Keep Britain Tidy Group

Mr. Speir: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what financial assistance the Keep Britain Tidy Group receive from Her Majesty's Government for their anti-litter activities; and whether he is satisfied that it is sufficient to enable the Group to carry out an adequate campaign.

Mr. Corfield: The Exchequer grant to the Group has been increased from £2,000 to £5,000 for this year in order to help it to expand its efforts. As a voluntary body, however, the Group also depends on support from other sources, and my right hon. Friend and I hope that this will increase too.

Mr. Speir: While being grateful for small mercies and small increases, may I ask my hon. Friend whether he would not agree that the cost of clearing litter is now a very large item in local government expenditure? Would he not, therefore, be justified in trying to persuade the Government as well as industry to contribute a great deal more generously


than they have done in the past to the work of' the Group, which is proving successful in many directions, but which is crippled by lack of adequate finance?

Mr. Corfield: Of course, I appreciate the importance of the work which the Group does, and by more than doubling the grant the Government have shown the way. I very much hope that industry, local authorities and private persons will follow.

Oral Answers to Questions — LOCAL GOVERNMENT

Buildings of Historic or Architectural Interest

Mr. Robert Cooke: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what steps he is taking to revise the lists of buildings of historic or architectural interest, to include the more important Victorian buildings; and to what extent he proposes to raise the grading of Victorian buildings already listed.

Mr. Corfield: The standards upon which buildings of the period 1850 to 1914 are selected for listing were revised in 1960. Since then special steps have been taken to ensure that the most important Victorian buildings are added to the lists if not originally included, and that gradings are revised where appropriate.

Mr. Cooke: Will my hon. Friend keep this subject continually under review in view of the growing appreciation of building of that period?

Mr. Corfield: I assure my hon. Friend that the areas which have already been visited are being revisited with that in mind.

Power Station, Leicester (Atmospheric Pollution)

Sir B. Janner: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he is aware that serious difficulties continue to be experienced by residents in Leicester owing to the grit which is falling on their homes in consequence of emissions from the local power station; what steps have been taken and

are being taken to deal with this position in the future; and whether the Alkali Inspectorate have yet devised methods of overcoming this type of nuisance in Leicester and generally.

Mr. Corfield: My right hon. Friend is not aware of any recent complaints. Additional precipitators and rectifiers are being installed and should be ready by October. The answer to the third part of the Question is "yes".

Sir B. Janner: Is not the hon. Gentleman aware that this has been going on for years, that the air has been polluted, and that he promised that by the end of last year sufficient steps would have been taken to remove the nuisance or reduce it to a very small degree? Why is he waiting until October to do something which is really necessary in that neighbourhood, as it is in other neighbourhoods? Does he realise that in recent reports it has been stated that pollution of the air, which includes this kind of pollution, is responsible to a very considerable degree for cancer as well?

Mr. Corfield: The hon. Gentleman knows quite well that I am not waiting until October. He will remember that I explained the problems to him in an Adjournment debate in July, and the modifications then outlined are running according to schedule. The fact that there has been an absence of complaints over the last few months shows that an improvement has already been effected.

Sir B. Janner: On a point of order, Mr. Speaker. In view of the unsatisfactory reply, I propose to raise the matter on the Adjournment.

Tree Felling

Mr. Prior: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he is aware of the disquiet caused by the indiscriminate destruction of trees; and whether he will take steps to make the felling of trees subject to planning permission.

Mr. Corfield: Local planning authorities already have power to control felling by means of tree preservation orders under Section 29 of the Town and Country Planning Act, 1962. Many


such orders are made, and my right hon. Friend does not think that further restrictions are necessary.

Mr. Prior: Is my hon. Friend aware that, after planning permission has been given to develop an estate, often the owner-occupiers of the estate, it being their property, will fell the trees in their gardens because they are upsetting the laundry and so on, that whole areas are becoming denuded of trees on this sort of pretext, and that stronger measures are needed?

Mr. Corfield: I do not think that one could transfer this responsibility anywhere from the local authority, but I can assure my hon. Friend that where an amenity is threatened by the felling of trees an order can be provisionally confirmed very rapidly—in a matter of hours.

Mr. MacColl: Would the hon. Gentleman explain the procedure? Surely it is not much use making an order if the trees have already been felled? How is the occupier to be stopped from felling a tree while enforcement proceedings are taking place?

Mr. Corfield: If a provisional order is made, the occupier commits an offence if he continues to fell the trees. It is up to the local authority to decide where existing trees are essential to the amenity and look ahead and pass the necessary order.

Mr. Hocking: Will my hon. Friend look into the matter of tree preservation altogether? Is he not aware that in many parts of the country tree preservation orders are made on trees which really are not worth preserving and that in other places no tree preservation orders are made at all? Will he issue a directive to local authorities or try persuading them to do something really worth while?

Mr. Corfield: I am sure my hon. Friend appreciates that any tree preservation order made by a local authority requires the confirmation of my right hon. Friend in order to make it an official order, and these matters are considered very carefully before confirmation is given.

Scout Hut, Burntwood

Mr. Snow: asked the Minister of Housing and Local Government and Minister for Welsh Affairs when the Clerk of the Parish of Burntwood may expect a reply to his letter on 9th April, 1964, a reminder having been sent on 29th April, to neither of which a reply or an acknowledgment has been received; and whether he will expedite a reply, which involves a site for a Scout hut at Burntwood, Staffordshire.

Mr. Corfield: A reply giving the parish council the consent it wanted was sent on 25th May: I very much regret the failure to acknowledge earlier.

Mr. Snow: Improbable though it may appear, I was once a Boy Scout. Therefore, the hon. Gentleman will understand that I was rather anxious that the parish should get support in this matter. I do not wish to make heavy weather of this, but ought not the parish council to get the same prompt attention as a larger authority would?

Mr. Corfield: Yes, Sir. I assure the hon. Member that parish councils do get the same attention. I apologise that acknowledgement was not made in this case. The very fact that it was a parish council meant that we had to consult the planning authority. That would not be the case if the application came from the planning authority itself.

Mr. M. Stewart: Is it not surprising that it is necessary for a parish council to have to go to the Ministry about a Scout hut? Might it not be possible to consider whether some of these powers ought not to be more decentralised?

Mr. Corfield: That is always a fair point, but in this case the reason why the parish council had to go to the Ministry was that public open space was involved.

Rating Valuation (Improvements)

Mr. Graham Page: asked the Minister of Housing and Local Government and Minister for Welsh Affairs (1) if he will initiate legislation to postpone the reassessment for rates resulting from an improvement to a dwelling-house, carried out by the owner-occupier


thereof, until such time as the house is let;
(2) if he will initiate legislation to postpone the reassessment for rates resulting from an improvement to shop or office premises, carried out by the owner-occupier thereof, until such time as the shop or office is let.

Sir K. Joseph: No, Sir. This would not be equitable. Some ratepayers would be paying on less than the value of the premises they occupied, while the others were paying on the full value.

Mr. Page: Does not my right hon. Friend think that it is rather unfair for an owner-occupier who has carried out improvements then to be punished by an increase in rates while he is still the owner? Secondly, having regard to the Offices, Shops and Railways Premises Act, is it not a fact that small shopkeepers will be put to considerable expense in improving their premises, and would it not be fair to relieve them of any increase in rates while they are still occupying the premises and not letting them?

Sir K. Joseph: But a good many of the rewards of virtue attract an increase of tax, and in these cases the occupier or owner of the house or shop gets the benefit of a more comfortable dwelling as well.

Planning Development

Mr. Barnett: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what machinery exists to enable an affected citizen to make known his views before his approval is given to a direction under Article 4 of the Town and Country Planning General Development Order 1963.

Mr. Corfield: None, Sir. The effect of a direction is only to require that planning permission should be sought for certain kinds of development generally permitted without express consent. The judgment involved is whether the area justifies particular care. Those affected will have the usual rights of appeal if, after direction, permission for development should be refused.

Mr. Barnett: Would not the hon. Gentleman agree that this is a disgraceful piece of legislation? Does it not

very seriously limit the rights of the individual landowner? Is the hon. Gentleman aware that a constituent of mine has been singled out for a direction under Article 4? Does not the hon. Gentleman consider that this might well be a case of victimisation of an individual and that my constituent is right to regard it so in view of the fact that no one else in the area has been served with a direction of this sort? Will the hon. Gentleman take steps to make it possible for the individual landowner to make his views known before a direction under this Article is served on him?

Mr. Corfield: In most cases, where an Article 4 direction is justified, it is required in a hurry, but if the hon. Member's constituent puts in a planning application for what he would otherwise do and is refused, he can appeal and if he is still refused he gets the same compensation as if the permit is revoked. If the hon. Gentleman will send me details of this case, and if there are other factors in it, I will look into it.

Mr. Barnett: Is the hon. Gentleman aware that my constituent had been using his piece of land for the purpose which has been refused under the direction and that having to apply for planning permission inevitably involves delay, particularly if the case has to go to appeal? As a consequence, my constituent is likely to be seriously affected financially by this.

Mr. Corfield: I cannot comment on an individual case without the facts. If the hon. Gentleman will send me the facts, I will willingly look at this.

Derelict Land

Mr. Boyden: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what is the total amount of derelict land shown in the planning authorities' development plans; and for how much of this land schemes of improvement have been approved or are in course of preparation.

Mr. Corfield: Development plans so far submitted show 37,700 acres of derelict land. Schemes of which I am aware are not necessarily related to this figure, but 1,874 acres are known to be included in reclamation schemes approved or in course of preparation.

Mr. Boyden: Is not that a surprisingly small figure for land reclamation? Is not the whole procedure for the reclamation of derelict land cumbersome and the results unsatisfactory? The national results are most haphazard. Will the hon. Gentleman look at this whole problem so that we can advance generally on this front?

Mr. Corfield: Local planning authorities have been asked to provide information showing the amount of derelict land they have in their areas and their proposals for reclaiming it in the development plans. My difficulty in giving exact figures is that the development plans all run for different periods so that I am not in a position to give the precise situation at any one time. But the present plans show that about 11,000 of the total of 37,000 acres are programmed for reclamation. I do not think that that is a bad proportion.

Mr. MacColl: Is it not the case that most of this programmed land is in the development districts and that this is why more progress has been made there?

Mr. Corfield: I think that, to a large extent, a lot of it is in the North and that the figures represent a fair proportion. I cannot, however, give the breakdown figures and be absolutely certain of the accuracy of the answer.

Mr. Boyden: asked the Minister of Housing and Local Government and Minister for Welsh Affairs how much derelict land there is in national parks and areas of outstanding natural beauty; how much of this land has been reclaimed since 1960; and what grant has been paid on this account.

Mr. Corfield: Local authorities are not required to inform my right hon. Friend of the amount of derelict land in national parks and areas of outstanding natural beauty. Since 1st April, 1960, 15 schemes for treating 89 acres of derelict land in these areas have been approved for grant under the National Parks and Access to the Countryside Act, 1949, and grant of £1,954 has been paid in respect of eight of these schemes. Grant estimated at £6,824 will be payable when claims are made for the remaining schemes.

Mr. Boyden: Does the hon. Gentleman think that a sum short of £7,000 is

adequate to clear derelict land in these areas? Surely there should, indeed, be practically no derelict land in such areas and those parts which have it should be cleared at once. What is the hon. Gentleman doing about it?

Mr. Corfield: The hon. Gentleman has answered the question himself. There is probably very little of such land in national parks, which accounts for the very few applications for loans to improve it.

Mr. Probert: asked the Minister of Housing and Local Government and Minister for Welsh Affairs how many applications have been received from Welsh local authorities for grants towards the cost of carrying out works of improvement on derelict land under the provisions of the Local Employment Act, 1960.

Sir K. Joseph: Sixteen.

Mr. Probert: Does not the right hon. Gentleman agree that this is wholly unsatisfactory progress? Does he not consider that the time is ripe for a new approach to this problem, which is outside the provisions of the Local Employment Act, 1960, so that areas which are not now designated as scheduled districts receive financial inducement? Furthermore, does he not agree, again in view of the unsatisfactory progress, that there should be a national survey to indicate where these problems exist and so that we can take the necessary and urgent action?

Sir K. Joseph: Yes, I agree that there should be a survey, and the Welsh Office will be making this survey as part of its Welsh plan to be produced next year.

Technical Services

Dr. Bray: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether sufficient use is being made of the technical services available to local authorities in the regional offices of his department to justify their extension.

Sir K. Joseph: I am glad to say that very full use is being made of these services, and I have already made plans for their extension as soon as the necessary additional staff can be obtained.

Dr. Bray: Can the right hon. Gentleman give fuller details of which particular technical services are in demand?

Sir K. Joseph: I am expecting nearly to double the number of architects, quantity surveyors and planning, research and estate officers in the Newcastle Regional Office. In Manchester, I am expecting to add six planning research and estate officers, where there have been none, and to increase the number of architects and quantity surveyors by two.

Depopulation in Mid-Wales (Report)

Mr. Watkins: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he will make a statement on Her Majesty's Government's policy on the Report of the Committee on Depopulation in Mid-Wales.

Mr. Hooson: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he accepts the findings of the Committee on Depopulation in Mid-Wales; and to what extent the policy of Her Majesty's Government will follow their recommendations.

Sir K. Joseph: May I first express my appreciation of the work done by Professor Beacham and other members of the Committee in preparing this detailed and valuable survey of the problems of Mid-Wales. I will be putting some detailed comments to the Association in the very near future and I will, of course, be keeping the House informed.

Mr. Watkins: Is the right hon. Gentleman aware that those of us who come from Mid-Wales join in his appreciation of the work of the Committee? Can we expect a statement on the immediate and long-term policy of the Government before the end of the Session?

Sir K. Joseph: The hon. Gentleman had better wait until he sees the comments I shall be making before 18th June, which I shall be circulating in the OFFICIAL REPORT.

Mr. Hooson: The conclusion set out on page 28 of the Report says:
The concluusion has been reached that further steps should be taken to strengthen the economy of mid-Wales ".

Does the right hon. Gentleman accept that conclusion and intend to do something about it?

Sir K. Joseph: I would prefer to wait until I can give the chairman, members of the Committee and this House my full comments on the Report.

Mr. C. Hughes: Is it not the case that this is the latest of a series of reports on Mid-Wales, all of which have stressed the need for urgent Government action to revitalise the area and stem depopulation? Why does the right hon. Gentleman need more time before he can make a statement on this? He has had ample time to consider it. This Report has been in his hands for months. Why keep us waiting still longer?

Sir K. Joseph: Out of courtesy to the chairman and members of the Committee. They are having a meeting next week. Just before that meeting I am sending them my comments, which I intend, with permission, to circulate in the OFFICIAL REPORT.

Mr. Watkins: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he will publish either an abridged edition or an edition without the maps of the Report on Depopulation in Mid-Wales published recently, in view of the fact that the full Report costs 27s. 6d., so that the smaller local authorities and other bodies interested may buy copies for their members.

Sir K. Joseph: I shall be prepared to consider this if I find that there is evidence of sufficient public demand.

Mr. Watkins: Is the right hon. Gentleman aware that an excellent report was published some years ago in an abridged form? What is to prevent him abridging this Report and giving a reply at once? There would then be savings on the cost of the Report in the lowest earning part of Britain.

Sir K. Joseph: Her Majesty's Stationery Office has produced an admirably printed report with carefully produced maps which Professor Beecham thought it necessary to publish. Until I think that an abridged version without maps is really needed I shall not take further action.

Non-Profit-Making Clubs

Mr. Shinwell: asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will now introduce legislation to exempt clubs of a non-profit-making character, engaged in promoting welfare, from local taxation.

Sir K. Joseph: No, Sir. Rating authorities have a discretionary power to give rate relief to such clubs if they fall within the scope of Section 11(4) of the Rating and Valuation Act, 1961, and I do not think there are grounds for going further.

Mr. Shinwell: Does the Minister recall that, when the Rating and Valuation Measure was in Committee, hon. Members who had promoted an Amendment were given an assurance that local authorities had this discretionary power? Is he aware that very few are using this discretionary power to exempt non-profit-making clubs engaged in welfare from rating, or even to modify their rating? Will he consider the position of workmen's clubs throughout the country, some of which are finding it difficult to continue?

Sir K. Joseph: No, Sir. I do not have information leading me to believe that failure to use the discretion is widespread. It is up to the local authority, which must take into account the interests of all ratepayers in its area.

Mr. Shinwell: Is the right hon. Gentleman aware that only the other day I received information from the general secretary of a club union proposing to promote a petition throughout the country to be presented to the Minister because of the reluctance of local authorities to use this discretionary power?

Sir K. Joseph: I will certainly study that petition, or, if the right hon. Gentleman cares to send me the letter, I will start giving study to it now.

Manchester (New Town)

Mr. C. Morris: asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will make a statement on the circumstances which are delaying the announcement of the location of a site for a new town to meet the housing needs of the city of Manchester.

Sir K. Joseph: I now expect to make an announcement towards the end of next week.

Mr. Morris: Is the right hon. Gentleman aware that that statement will be welcomed by the citizens and the City of Manchester? Can he assure me that when the announcement is made he will take into account the 15 long years which the city has been waiting for it and expedite the legal processes which will bring this new town into being?

Sir K. Joseph: I am very anxious that Manchester should be enabled to get on even faster than its present accelerated pace, but I cannot promise to ignore the legal processes.

Mr. Vane: Can my right hon. Friend assure me that Manchester is not planning to put this new town on the shores of Ullswater?

Mr. M. Stewart: Does the right hon. Gentleman remember that it is some months since he emphatically said that this announcement would be made very soon? Is he aware that we shall, therefore, await the end of next week with some interest?

Foundry, Stoke-on-Trent (Nuisance)

Mrs. Slater: asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware of the continued nuisance from the Goldendale Foundry, Stoke-on-Trent, and of the concern of people in the area about it; if he is satisfied that there is a possibility of a complete cure of the effects of the nuisance; and what action he will take to secure this.

Mr. Corfield: My right hon. Friend and I are aware of this nuisance. The Alkali Inspectorate, with the company's full co-operation, is energetically seeking a cure, but technical difficulties have still to be overcome. New fume arrestment plant for the hot blast cupolas should be erected soon, and much effort is being concentrated on making the existing fume arrestment plant on the blast furnaces work better.

Mrs. Slater: Is the Minister aware that that kind of language has been used for the last four years or more about this firm? I have letters sent to me by the


Ministry using exactly the same terms, that new machinery is being designed and that it is expected to be introduced; but still we carry on. Is the hon. Gentleman aware that this nuisance occurs in an area where people naturally suffer from bronchitis, asthma and pneumoconiosis; that people living there are unable to open their windows, that women are unable to put out their washing, and that others rest by the wayside because of the sulphur fumes? I appreciate the work of the Alkali Inspectorate, but is it not the fact that in an age when we can put a man into space we ought to be able to solve this scientific problem?

Mr. Corfield: It is doubtful whether there is a direct connection between putting a man into space and curing fumes, but I stress that the plain fact is that the state of knowledge is not such that we can guarantee success. I assure the hon. Lady that every effort is being made to try every possible alternative to achieve that, but it would be dishonest for anybody standing at this Box, or in any other place, to use language other than that to which she has referred.

Rating (Interim Relief) Act, 1964

Mr. Lipton: asked the Minister of Housing and Local Government and Minister for Welsh Affairs what reports he has received to date about the working of the Rating (Interim Relief) Act, 1964.

Sir K. Joseph: I have received very few complaints.

Mr. Lipton: Has the right hon. Gentleman not yet heard that this Act is regarded as a cruel hoax by thousands of over-burdened, harassed and indignant ratepayers, who derive little or no benefit from it? Has not it proved to be just another bit of pre-election window dressing, which, unfortunately, has gone awry because the General Election was postponed until long after the Act came into effect?

Sir K. Joseph: No, Sir. I have no such evidence, but if the hon. Gentleman would be good enough to send me the evidence that he clearly has of people disappointed by the working of the Act I shall, of course, study it carefully.

Sir J. Eden: Can my right hon. Friend say whether he has information to in-

dicate the way in which local authorities have been able to work the provisions of this Act so as to bring the relief provided for in the Act to those who need this form of assistance? Can my right hon. Friend indicate that they have found no difficulty at all in operating this Measure?

Sir K. Joseph: I have had evidence of a number of schemes which are working well. I have also had evidence of two or three areas which are not operating the Act, and I am in touch with them.

Mr. Barnett: Is the right hon. Gentleman aware that one local authority is operating the Act in such a way that an individual qualifies for relief if he is in receipt of a pension, but does not qualify for it if he is living on the proceeds of savings accumulated during his working life? Does not the Minister feel that that is an unfair way of operating the Act?

Sir K. Joseph: I am chary of commenting on the methods of local authorities, since Parliament left it to them to decide how to work the Act. I am sure that the hon. Gentleman can discuss any comments that he has with the rating authority concerned.

Public Lavatories (Washing Facilities)

Mrs. Hart: asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will request all local authorities to provide free hand-washing facilities in all public lavatories.

Mr. Corfield: My right hon. Friend will certainly consider a circular to local authorities with advice on this subject.

Mrs. Hart: Many people will be grateful for that Answer, but it seems extraordinary that at a time when we are being asked to be conscious of hygiene, woman can be asked to pay 4d. for the privilege of using a piece of soap. When issuing his circular to local authorities, will the hon. Gentleman request them to pay particular attention to the need for either hot air machines for hand drying, or for paper towels?

Mr. Corfield: I shall certainly consider that and any other suggestions. I


assure the hon. Lady that I share her concern over this matter. We will lose no time in instigating the advice that we give.

Water Rate Refolds

Dame Irene Ward: asked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he will take steps to enable water undertakers to make refunds of water rates, in the same way as local authorities may refund general rates, when overpayment has resulted from a mistake in assessment over a period of years.

Sir K. Joseph: I will consider how to deal with this at the next opportunity of legislating on water charges.

Dame Irene Ward: I am sure my right hon. Friend will agree that the case that I sent him showed that some elderly people had to wait a very long time to get back some money that was their just due. Is my right hon. Friend aware that I am rather disappointed that he would not agree to my introducing a Ten-Minute Rule Bill? How long have we to wait to have the deficiencies of this legislation brought up to date?

Sir K. Joseph: I hope to make a statement on water charges soon, and legislation may arise from that. I had to advise my hon. Friend that the matter was rather too complicated, with too many implications, for it to be suitable for a Ten-Minute Rule Bill.

Oral Answers to Questions — CHANCELLOR OF THE EXCHEQUER (SPEECH)

Mr. Lipton: asked the Prime Minister whether the public speech of the Chancellor of the Exchequer to the County Councils' Association on 27th May on the subject of rates represents the policy of Her Majesty's Government.

The Prime Minister (Sir Alec Douglas-Home): Yes, Sir.

Mr. Lipton: If the Prime Minister agrees with the Chancellor of the Exchequer that rates will continue to rise substantially unless the present system is modified, is that any excuse for him to be as lazy as the Chancellor of the Exchequer in his approach to the problem?

The Prime Minister: We have set certain machinery in motion. Professor Allen has a committee in being which is looking into the facts of the matter and will report. No doubt we will have to take some action, but we want to take the right action on the right facts.

Dame Irene Ward: May I ask my right hon. Friend whether he will ask the hon. Member—[HON. MEMBERS: "No."]

Mr. Speaker: Order. It is not one of the duties of the Prime Minister towards the House to ask questions of hon. Members of the Opposition. Mr. Michael Stewart.

Dame Irene Ward: Mr. Speaker, may I put the question in another way?

Mr. Speaker: At the moment I have called Mr. Michael Stewart.

Mr. M. Stewart: But has the Prime Minister—

Dame Irene Ward: On a point of order. Mr. Speaker, you called me to ask a supplementary question.

Mr. Speaker: I called the hon. Lady to ask a question, but she asked a question which was out of order and so I called another hon. Member.

Mr. Stewart: According to a report in The Times, the Chancellor of the Exchequer said that the Government were examining the possibility of additional sources of revenue for local authorities. As that would lie outside the scope of the Allen Committee, what steps are the Government taking to inquire into this matter?

The Prime Minister: We have our own methods of inquiry. As I think the hon. Gentleman knows, the Allen Committee is to look into the facts. The problem here is that there are some ratepayers in some areas who are suffering hardship. We want, therefore, to apply the remedy to the right places, and to the right people.

Sir C. Taylor: Is the Prime Minister aware that very recently the Government accepted a Motion, which I moved, which suggested that a greater proportion of the cost of education should be borne by the central Government rather than by the rates?

The Prime Minister: It is the extra expenditure on education which, I think,


is largely responsible for this problem. If not now, at least it raises problems for the future, and it is these problems which we are studying and on which, I hope, in future we shall be able to act sensibly.

Mr. M. Stewart: Does the Prime Minister realise that he has not answered my question at all? The Chancellor of the Exchequer said that the Government were inquiring into the possibility of additional sources of revenue for local authorities. What I asked the Prime Minister was what inquiries, in what form, and by whom, the Government were making into this matter?—not the field of the Allen Committee, which is something quite different. Will the right hon. Gentleman also say why, if the Government are now inquiring into this, they did not take the advice of the Opposition about a year ago to do so?

The Prime Minister: Because we had put the inquiry into the hands of Professor Allen on the facts.

Mr. Stewart: No.

The Prime Minister: It is no use the hon. Gentleman saying "No", because that is what we have done, and what we are going to do is to make our own inquiries so that when Professor Allen reports we shall be able to take action quickly.

Oral Answers to Questions — PUBLIC RECORDS

Mr. F. Noel-Baker: asked the Prime Minister when the recommendation of the Departmental Committee on Public Records that some classes of records should be opened before a lapse of fifty years will be implemented.

The Prime Minister: The Committee on Departmental Records made no specific recommendation on the subject. All that it suggested was that the question might be examined when circumstances permitted. I understand that the Advisory Council on Public Records will shortly be reviewing the general operation of the 50-year rule; and it will no doubt take the Committee's suggestion into account in framing its advice to the Lord Chancellor.

Mr. Noel-Baker: When that examination is made, will the Prime Minister put it to the Committee that the present

arrangement discriminates in favour of selective and partial accounts of retired politicians and against the objective and impartial efforts of some historians? Will he consider the whole question again, especially in view of the memoirs published in the last few months?

The Prime Minister: As I said in the House a short time ago, at this stage I am not prepared to alter the 50-year I rule. Only a comparatively short time ago the House agreed that this was the right procedure. On matters of detail the Lord Chancellor will be advised by the Committee.

Mr. Curran: In view of the fact that the 50-year rule as it now stands will; release documents published in 1914 but no later, will my right hon. Friend consider the desirability of similarly exempting documents relating to the First World War and of carrying the exemption period down to 1920 or 1921?

The Prime Minister: I will consider that.

Mr. J. T. Price: Although there may be a good deal in the technical argument about relaxing or modifying the 50-year rule for general records, how does it come about that retiring Prime Ministers can make vast fortunes from the publication of records which are not available to anybody else?

The Prime Minister: I understand the references which the hon. Member makes obliquely, but nevertheless my inclination, after recent experience, would be rather to tighten up the 50-year rule than to relax it.

Oral Answers to Questions — MULTILATERAL NUCLEAR FORCE

Mr. Mulley: asked the Prime Minister what arrangements he has made to co-ordinate the views of the Foreign Office and Ministry of Defence in putting forward alternative proposals for a multilateral nuclear force within the North Atlantic Treaty Organisation Study Group.

The Prime Minister: There is already effective co-ordination between the two Departments, and no special arrangements were necessary in this case.

Mr. Mulley: May we assume from the Prime Minister's Answer that the respective views of the Foreign Office and the Ministry of Defence are now reconciled about the multilateral force, and can he say which one prevailed? Secondly, will he confirm that there has been no commitment by Her Majesty's Government to participate in the proposed force? Is not there a danger that by putting forward proposals they will be construed by our allies as an acceptance, in principle, of that force, and a commitment to participate in it should it be set up?

The Prime Minister: No, Sir. There is no commitment, and I do not think that by putting forward possible alternative methods we accept the principle, although I have always said that there is a lot to be said, on the political argument, in favour of this force. But, if there is to be such a force, we want to get the best military set-up. That is the wish of the Foreign Office and the Secretary of State for Defence.

Mr. Gordon Walker: Does that reply mean that the Government have not yet made up their mind whether they are for or against a multilateral force?

The Prime Minister: Nobody has made up his mind, in this Government or any other Government, because this is a matter which is being studied in Paris and Washington.

Oral Answers to Questions — MEAT (RETAIL AND WHOLESALE PRICES)

Mr. Thorpe: asked the Prime Minister whether, to allay widespread anxiety over margins charged in the meat distributing trade, he will instruct the President of the Board of Trade to consult the Minister of Labour and the Minister of Agriculture, Fisheries and Food with a view to publishing simultaneously each week the retail prices of meat already collected weekly by the Ministry of Labour in 200 centres of population, and the wholesale prices of meat collected by the Ministry of Agriculture, Fisheries and Food.

The Prime Minister: In its report to Agriculture Ministers last February the Verdon Smith Committee stated that it could find no evidence that margins in

the wholesale or retail meat trades in the period 1958–62 as a whole had been excessive. The price comparisons suggested by the hon. Member would add no useful information, since the statistical series he refers to are not really comparable and neither is satisfactory for this particular purpose.

Mr. Thorpe: Is not the Prime Minister aware that it reached that conclusion because paragraph 487 of the Verdon Smith Report said that there was no adequate evidence available? Is not that the reason why it was not able to draw any conclusion? Does not the Prime Minister agree that the more information available about profit margins in this trade the greater the protection for the consumer against extortion? In view of the valuable work which the Ministry of Agriculture and the Ministry of Labour are doing in collecting particulars of wholesale and retail prices, is not this a sphere in which the Government could give valuable assistance and guidance to consumers?

The Prime Minister: I am certain that my right hon. Friend is always willing to consider whether he can give any better figures which would serve the public, but I understand that in this case to compare the price of retail cuts with the wholesale price of a side of beef would add nothing to anybody's knowledge.

Mr. Thorpe: But since none of those figures are published in any event, surely it is difficult for the consumer to judge whether they are good figures or not?

The Prime Minister: I did not say that these figures were published. I said that if my right hon. Friend could help the public in any way he would certainly do so. But this is certainly not a way in which the public could be helped.

Oral Answers to Questions — DECEASED WORLD STATESMEN (MOTIONS OF CONDOLENCE)

Mr. Sorensen: asked the Prime Minister if he will adopt the practice of moving Motions in the House of Commons that would enable the House to express its condolences and respects at the demise of Commonwealth Heads of Government, such as in regard to the late Pandit Nehru.

Miss Lee: asked the Prime Minister what rules determine the occasions on which the House may pay its respects to leading world statesmen, including Commonwealth Prime Ministers, at the time of their decease.

The Prime Minister: This is a matter which is governed by the precedents which the House has established over the years and in general I think it is wise for us to be guided on these occasions by the custom of the House.

Mr. Sorensen: Does the Prime Minister appreciate that on both sides of the House there is real regret that Parliament, as such, could not express sympathy with India at the recent death of her Prime Minister? Even though there may not be a precedent for this, is that not all the more reason for this matter to be very carefully considered, not only in respect of India but in respect of our other partners in the Commonwealth, so that on occasions of great national calamity, or the death of some eminent statesman, there should be some opportunity in this House for Parliament, as distinct from the Government, to express its sympathy with other Parliaments? Would not he again consider the possibility of devising some means of meeting this situation?

The Prime Minister: I have said that this is a matter for the House. I went to Mr. Nehru's funeral, and the right hon. Member the Leader of the Opposition accompanied me. I thought that this was the best way of expressing to the Indian nation as a whole the great sympathy of this Parliament and of the whole country. As the House will understand, it would be extremely difficult, upon the death of a Commonwealth Prime Minister, to attempt to judge whether the event warranted tributes in this House. I would remind the House that, in the case of the death of Mr. Mackenzie King, who was Prime Minister for over 21 years, we followed our usual custom, and no such tribute was moved.

Miss Lee: Does the Prime Minister recall that on the death of President Kennedy the House was privileged—and appreciated the privilege—to pay its respects? Can he explain why the rules of the House enabled us to pay our

respects on that occasion and yet, upon the death of someone who was described last night by the ex-Prime Minister, in the Prime Minister's presence, as the doyen of Commonwealth Prime Ministers—indeed, of world statesmen—we could in no way commemorate it in this House as a House?

The Prime Minister: I am willing that this question should be considered and discussed, if the right hon. Gentleman the Leader of the Opposition would like to discuss it. But I must point out that if we were to start paying tribute—

Mr. Manuel: We have started.

The Prime Minister: —to Commonwealth Prime Ministers, it would have to be to all Commonwealth Prime Ministers.

Sir G. Nicholson: Nevertheless, in spite of the obvious difficulty and all the complications, surely the fact remains that this House would have liked to be associated with the tribute paid by my right hon. Friend and the Leader of the Opposition in going to India on this occasion. Can no way out be found? Surely it is not a problem that it is impossible of human solution?

Mr. H. Wilson: Is the Prime Minister aware that my hon. Friends and I were prepared to take part in any tributes to Mr. Nehru that could have been arranged in this House? Although one is often wise in following precedents from the past, this House must have the right to create precedents when that seems to be justified. Is the right hon. Gentleman aware, however, that many will feel that the national acts of tribute last night, in which leaders of all parties took part, together with other speakers, will be regarded as speaking for this House and the entire nation? Whatever may have happened last week, and with regard to the future, will the right hon. Gentleman also take it from us that we think it would be right to have talks, so that on a future occasion—although nothing can be done about this one—the House would be prepared to act in accordance with what I am sure would be the feelings of all Members?

The Prime Minister: The House had ways and means of making such feelings known. Last week, as far as I know,


nobody took advantage of them. [HON. MEMBERS: "Oh."] If I am wrong in that, I would only say that I was not myself aware of it. I may have been away. As far as the future is concerned, I would welcome talks on this matter because it is something which I think we ought to discuss.

Mr. C. Pannell: Will the Prime Minister read the precedents in this matter again? If he does, he will not quote the case of Mackenzie King, who died in the middle of a Recess—and that is why he was not considered for a tribute to be paid. That also applies to many other people. Anybody reading the precedents will see that there is no pattern about them. There is a great deal of caprice in this, sometimes springing from the emotions of the Speaker and sometimes from the emotions of a Prime Minister. There is no pattern which will stand up to a declaration in the House that tribute could not have been paid to Mr. Nehru. How does the Prime Minister square his statement with the facts concerning one Dominion Prime Minister, Mr. Michael Savage, Prime Minister of New Zealand?

The Prime Minister: This is a question for the House which we should settle by discussions with each other. I look forward to discussions with the right hon. Gentleman.

Oral Answers to Questions — COMMONWEALTH PRIME MINISTERS' MEETING (SOUTHERN RHODESIA)

The following Question stood upon the Order Paper:

Mr. BOTTOMLEY: To ask the Prime Minister if he will make a statement concerning the discussion he has held with the Commonwealth Prime Ministers about whether an invitation should be extended to the Prime Minister of Southern Rhodesia to attend the forthcoming Commonwealth Prime Ministers' Conference; and if he will give details of the communication he has sent to the Prime Minister of Southern Rhodesia.

The Prime Minister: With permission, I will now answer Question No. Q8.
I have now completed my consultation with other Commonwealth Governments on the question whether the Prime

Minister of Southern Rhodesia should be invited to attend our meeting next month. I have informed Mr. Smith that the consensus of opinion is conclusive that in view of the size of the modern Commonwealth the meetings of Prime Ministers should in future be confined to the representatives of fully independent states.
I also told Mr. Smith that I would welcome a general talk with him in London either before or after the Commonwealth conference. He has thanked me for this invitation, but has asked that it should be left over pending further correspondence between us.

Mr. Bottomley: Is it not a fact that the communication represents the united views of all the Prime Ministers and not of one group alone? If we are to create a multi-racial Commonwealth, does it not follow that Her Majesty's Government have responsibilities not only towards 250,000 white settlers in the Southern Rhodesia area, but also towards nearly 4 million Africans there? In those circumstances, does he see any useful purpose being served in, at the time of the Commonwealth Prime Ministers' conference, calling together African representatives and Mr. Smith at the same time?

The Prime Minister: The last suggestion would be in the nature of a conference, and I have no reason to believe that all the parties in Southern Rhodesia would attend.
Answering the first part of the supplementary question, I have used the phrase "the consensus of opinion is conclusive", and I think that the right hon. Gentleman would, therefore, be right in assuming that this was the feeling of a very large majority, indeed nearly all.

Mr. Turton: Will my right hon. Friend repeat the assurance which he gave to the House on 30th April this year, that it would not be the practice of a Commonwealth Prime Ministers' conference to discuss the internal affairs of Southern Rhodesia at any formal meeting? Will he give the House an assurance that as chairman he would rule such discussions out of order?

The Prime Minister: I never disclose to anybody the agenda of a Commonwealth Prime Ministers' conference, but


I confirm that we do not discuss each other's internal affairs at formal meetings. But, of course, there are many occasions outside on which these matters are discussed.

Mr. Grimond: Can the Prime Minister clear up one point? As I understand, the Prime Minister of Southern Rhodesia has alleged that this was a breach with precedent and that Southern Rhodesia has some right by precedent to be present at these conferences. Can the Prime Minister make it clear that that is not so and that there is no breach with what has been done before? Will he make it clear that the consultations which he undertook with the other Prime Ministers of the Commonwealth and their unanimous decision, as I understand the position, may have made a new precedent, but that it is not contradictory of anything which has previously been done?

The Prime Minister: Yes, Sir. I can confirm that, and I have done so at an earlier date.

Mr. Biggs-Davison: Is there not a long tradition that Southern Rhodesia should be represented at this conference? Does my right hon. Friend realise that many of us will regret the absence from the conference of a Prime Minister whose Battle of Britain record symbolises the sacrifices made by Southern Rhodesia for the Commonwealth in two world wars?
While I accept what my right hon. Friend said, may we be assured that everything possible will be done at the forthcoming conference to check a growing intolerance within the Commonwealth which endangers its survival?

The Prime Minister: I hope that there will be no evidence of intolerance when the Prime Ministers meet. In fact, I am sure that there will not be. Southern Rhodesia has been a most loyal supporter of the United Kingdom in two wars and in many ways, and I hope that both sides of the House will combine and co-operate to try and find a solution to the problem of the future of Southern Rhodesia which is acceptable to the House, broadly acceptable in Southern Rhodesia, and to the Commonwealth.

Mr. Bottomley: Will the Prime Minister accept it from me that what we are all anxious to do is to secure the maximum co-operation so that good will and harmony will prevail in Southern Rhodesia? This can be done not in terms of black and white; there are blacks and whites who have to live together and the blacks are overwhelmingly the greater in number. In view of this, would not he give further consideration to the suggestion which I made, of trying to get around a conference table, at the same time as the Prime Ministers' meeting, representatives of both Africans and Europeans of Southern Rhodesia?

The Prime Minister: I do not think that I can encourage the right hon. Gentleman in thinking that his latter suggestion is practicable. What I can say is that the constitution of Southern Rhodesia provides for a multi-racial country and that if the Constitution is worked we shall have a multi-racial solution.

BRITISH VICTIMS OF NAZI PERSECUTION (COMPENSATION)

The Secretary of State for Foreign Affairs (Mr. R. A. Butler): With your permission, Mr. Speaker, and that of the House, I wish to make a statement about the signing of an Agreement with the Federal German Republic for the compensation of British victims of Nazi persecution.
I am glad to announce that the Federal German Government have agreed to pay to Her Majesty's Government the sum of £1 million to compensate certain British victims of measures of Nazi persecution, that is to say, United Kingdom nationals, who, as a result of such measures, suffered loss of liberty or damage to their health, and the dependants of those who died as a result of such measures.
The Agreement comes into force on signature and is not subject to ratification. The text will be available to the House tomorrow afternoon. Following the pattern set in other bilateral agreements on compensation made by the Federal German Republic, distribution of the sum is left to the discretion of Her Majesty's Government.
As soon as possible we shall call for claims, at which stage those who consider themselves eligible in accordance with the terms of the registration notice, to which wide publicity will be given, should make application.
I trust that the House will welcome the Agreement.

Mr. Gordon Walker: Is the right hon. Gentleman aware that certainly on this side of the House, and I am sure on both sides, hon. Members welcome this Agreement? I should like to ask him one or two questions. What he said,
following the pattern set in other bilateral agreements
seems to imply some delay in coming to this Agreement in regard to this country. Would he comment on that? If there has been delay, will he tell us why?
Can he say whether, broadly speaking, the rate of compensation for British people who have suffered from this persecution is equivalent to the rate of compensation of other nationals? What is meant by "measures of Nazi persecution"? Does it mean people who have been in concentration camps, or does it go further than that, because there were many forms of Nazi persecution?

Mr. Butler: There is no doubt that it has taken a long time to reach this Agreement. It has been a very difficult negotiation. I am glad that we have reached agreement with the Federal German Government at a figure which I think compares very favourably, considering the number of applicants we assume there will be, with those made with other countries.
I cannot give the rate of compensation until we get the claims in as a result of the registration notice to which I have referred in my statement. The right hon. Gentleman asked about the proportions. Judging by the numbers that we think are eligible—I say "we think", because we cannot prove this until we get the claims—we think that the proportion should rate very favourably with the agreements made with other countries.
Answering the right hon. Gentleman's other question, I think that we had better wait for the registration notice. We cannot define "Nazi persecution" exactly today. I must ask the House to wait for the registration notice, and I must say

that it is essentially for those who have been in concentration camps.

Mr. Neave: Is my right hon. Friend aware of the very general relief which will be felt in the House and elsewhere at the fact that these victims of Nazi ideology are at long last to be compensated? Will my right hon. Friend say, in respect of the various categories, what preparatory work has so far been done to divide them into Service people who were in concentration camps, Channel Islanders, and other civilians, including resistance workers? When will the process of registration begin?

Mr. Butler: I am obliged to my hon. Friend for his statement of welcome. As regards the preparatory work, we have done our best to see what the numbers will be, but we have come to the conclusion that, pending the signing of the Agreement, we could not reach a final list. We therefore propose to make a registration notice in which the terms of eligibility ought to be clear, or at least clear enough for the applicants to make their claims. When they make their claims, we shall then be able to decide upon them.

Mr. H. Wilson: Perhaps this will be clear from a close study of the statement, but will the right hon. Gentleman say whether the scheme will apply to those British subjects who suffered from Nazi persecution not only in the area covered by the Federal German Government today, but, for example, in Austria, Czechoslovakia and Poland?

Mr. Butler: The term "Nazi persecution" is taken to cover any area in which Nazi persecution took place.

Dame Irene Ward: I thank my right hon. Friend for his own personal work in this matter, which, I am sure, is much appreciated by both sides of the House. Is he quite certain, since the lists have not yet been properly prepared, that the sum is sufficient adequately to cover what we think is due to these people, in comparison with what has been awarded to other countries, such as France? If not, is there to be any arrangement with the Federal German Government that, if when the lists are prepared it is found that the sum is not sufficient and is not generous, we shall be able to ask for some more? Would


my right hon. Friend bear in mind that many of us think that this is very important, since we have not been able to get any facts from my right hon. Friend about how many people are likely to be involved?

Mr. Butler: I could not undertake that the matter would be reopened with the Federal German Government, because we shall only just this afternoon be signing the Agreement with them. From the preparatory work which has been done, it is our opinion that this sum will cover the claims which we have in mind.

Sir B. Janner: May I also congratulate the right hon. Gentleman on the very long and strenuous struggle that he has maintained in getting as far as he has got? Is he aware that in certain circumstances compensations are being contemplated by the Federal German Government which are not consistent with the amount of injury sustained by the victims of Nazi persecution? Is he satisfied with the answer he gave to the hon. Lady, that we shall not be in a position at some future time to reopen the matter in the event of the amount being not at all sufficient to cover the claims?
Further, during the course of the negotiations which are likely to take place in future, will he bear in mind that many British subjects, as well as others, who want to lodge claims for compensation or restitution in respect of injuries received and property lost owing to Nazi persecution are unable to do so because their claims had not been lodged by October, 1953? Will he please go into that matter at the same time?

Mr. Butler: The answer to the last part of the; hon. Gentleman's question is that I will see that that point is investigated. The answer to the earlier point is that the discretion lies with Her Majesty's Government and not with the Federal German Government.

Mr. P. Williams: I welcome this Agreement, but would my right hon. Friend accept that the figure of £1 million appears to be slightly suspect and rather small? Can he tell the House how the figure was arrived at? Will he make it quite clear that, should the House wish to reopen the matter, it will be able to do so and have the figure enlarged?

Mr. Butler: I do not think that we can judge whether the figure is adequate until we see the claims coming it. In relation to the facts that we have and the numbers of cases we have in mind, we think that this Agreement and the amount is sufficient to cover those who will make claims. Reopening the matter is for the House, but I think that today we must accept that the Agreement has been signed.

Mr. Gordon Walker: May we take it for granted that the victims of Nazi persecution in the Channel Islands are included in the arrangement?

Mr. Butler: I could not go further into that this afternoon. I will answer the right hon. Gentleman at another time.

Several Hon. Members: rose—

Mr. Speaker: We must get on. There is no Question before the House.

NEW MEMBER SWORN

Terence George Boston, esquire, for Faversham.

SINGLE TRANSFERABLE VOTE

3.47 p.m.

Dr. Donald Johnson: I beg to move.
That leave be given to bring in a Bill to provide for the election of Members of Parliament by means of the system of the single transferable vote in any constituency in which the demand has manifested itself by local action.
I do not think that I have need to dilate at length on the nature of the proposal in my proposed Bill. The question of the alternative vote has come up from time to time in our political life and during the present century. In asking leave to introduce the Bill I would like to remind the House this matter has most respectable precedents, including numerous statements by the right hon. Member for Woodford (Sir W. Churchill).
The Bill would not, I wish to emphasise, attempt to alter our present electoral system, but provide that on occasions where local demand manifests itself—say, by means of a petition—the simple transferable vote system could be introduced into any single constituency, if need be for a single election only.
The Bill has an exact precedent in recent years: the Representation of the People (St. Albans) Bill, which was introduced by the noble Lord the Earl of Verulam when he sat in this House as the hon. Member for St. Albans. On 26th March, 1954, he introduced that Measure and described it as
…a small and modest Bill which would permit a limited experiment".
It is in that spirit that I am asking leave to introduce my Bill.
The noble Lord further said, in a somewhat prophetic fashion, that his Bill would protect the "independently-minded candidate". He spoke of the "middle-of-the-road candidate" and added that it would
…influence the strongly partisan party feeling to adopt perhaps more moderate ways."—[OFFICIAL REPORT, 26th March, 1954; Vol. 525, c. 1599–1602.]
When the noble Lord introduced his Bill in 1954 he did so in an altruistic spirit, but 26th March of that year being a Friday, his Bill was counted out in

the same manner as so many other admirable altruistic Measures leave the scene.
I, on the other hand, must confess an interest in my Bill. Owing to a controversy which is by now fairly well known—and about which I need only say, at this stage, that both sides are pursuing their course with equal obstinacy—there might well be two candidates of the Conservative persuasion in Carlisle at the next General Election. If that happens it may be that the undesirable position will occur that there will be wasted votes on either one side or the other.
I do not wish today to resurrect dead controversies, or to bring in any form of partisan feeling in what I say. It is a type of situation which can occur and which, indeed, has occurred on both sides of the House. I have felt it my duty to appeal to the House as a whole, as well as to hon. Members individually, in stating that, in a situation such as has arisen in Carlisle and elsewhere in the past 10 or 15 years, we are up against one of the problems of the party system in this country and the strength with which it has manifested itself throughout this century.
We accept in this House the discipline of the party system as a whole. It is proper that it should be there and we acknowledge that, at the centre, it is exercised with moderation and centuries of experience behind it. However, in recent years a fresh discipline has manifested itself in the party system; that of the local party committee. It is exercised somewhat easily, not always with the full sense of responsibility or with the many years of experience with which we are familiar in the central discipline. It is one from which, in my experience, the individual hon. Member has totally inadequate protection.
I have no time today to go into this in detail, although there is one assertion which should be recorded in the annals of this House; the assertion made by the chairman of the Carlisle Conservative Association in these words:
Dr. Johnson has always been an outspoken M.P., and, within reason, there is no objection to this. But it is, of course, an Association's duty to decide in this context what is reasonable and what is not.


I leave it to hon. Members to ponder on the implications of that statement.
I need only draw attention to the concern that is occasionally expressed in this House, and frequently outside, at the decline in the powers and prestige of Parliament. The Sunday newspapers this last weekend have been full of reviews of the book by Dr. Bernard Crick, in which this phenomenon is commented upon quite freely. I must put it on the record, this being perhaps the last speech that I shall have the occasion to make in this House, that my own main feeling during my nine years of membership has been one of utter helplessness as against the permanent bureaucracy.
The cure for this lies in the hands of hon. Members of the House. If, as happened in my case, one's career is cut off almost immediately one mentions this, there is little hope for the future solving of this problem. I am recommending my Bill to the House as a remedy for this state of affairs. I have no sponsor other than myself and I feel that, according to the traditions of the House, and the protection which it gives to the individual, this is appropriate, since the Bill is designed to protect the individual.
Its effect is that it allows an appeal in the constituency from a small committee to the voters as a whole in as much as they can, in certain instances, vote for alternative candidates of the same political persuasion without the fear that they are wasting their votes.

3.58 p.m.

Mr. Anthony Wedgwood Benn: The whole House will have listened with sympathy and interest to the remarks of the hon. Member for Carlisle (Dr. D. Johnson) in introducing his Motion. The difficulties in which he has got himself with his local Conservative association are not by themselves a case against his proposed Measure. Every case must be looked at on its merits. Hon. Members on both sides will remember the similar incident recently, when Mr. Nigel Nicolson was removed by his local Conservative association; and, certainly, this is a problem which, although not peculiar to hon. Members opposite, does present itself occasionally.
There are many arguments that might be used against the hon. Member's pro-

posed Bill. I want to list them, but not to use them. The first is that the Bill might be thought of as a preparation for some party advantage for the party opposite. It may be that, like the right hon. Gentleman the Member for Woodford (Sir W. Churchill), who proposed proportional representation as a way of winning the Liberals over to support the Conservative Party, this Bill might have been introduced for that reason, but I do not believe that it has, and, if looked at from the point of view of the proposals which have been made for amending the electoral law, it will be found that every party has, at one time or another, come out in favour of it.
The second argument against it might be that it is too near to election time to introduce it. I do not accept this, because, if it is a good proposal, then the House should concede it. The third is that private Members should not seek to amend the Constitution; and-whoever else might be able to use that argument, it is certainly not one which commends itself to me. The House must look at this proposal on its merits alone and it seems to me that the proposal falls down on its merits.
First of all, as the hon. Member will know very well, he offers no greater guarantee of proportionality in the representation of the different parties in this House of Commons. We all know that under the present system of voting it would be possible for one party to get more votes than another and yet only to have one Member, whereas the party with the minority of the popular votes would have 629 Members. Under the proposal of the hon. Gentleman, it would be possible for a party with only 26 per cent. of the popular vote to have 100 per cent. membership in the House.
I do not know whether the hon. Member wishes me to go into details. But if the votes for the major parties went 49–25 in half the constituencies and 25–49 in the rest, a minority party getting only 26 per cent. of the popular vote could win every seat and we could get just as big a nonsense from his proposal as from the present system.

Mr. Jeremy Thorpe: No.

Mr. Benn: The hon. Gentleman will find that that is so.
The second point is that once this happened it would encourage a multiplicity of candidates. It is no use applying this to the hon. Gentleman's own case. There are many hon. Members opposite—and, it may be, on this side of the House, too—who would like to be in a position to test their strength against their colleagues locally, knowing that they could not lose and their party could not lose. If this were done it would involve extending to the electors a choice which is in a sense a false choice. Were the hon. Gentleman to get his Bill and be reelected and come back to the House, he would discover that the architecture was still the same. There are only two Division Lobbies in the House. For every proposal that comes before us there is either "Aye" or "No", or a quiet abstention.
If we extend to the electors the idea that there is a wide variety of choice which manifestly does not exist, I think that we should be encouraging a myth. What is the myth? It is, of course, that the parties do not really exist. Hon. Members on both sides of the House know of arguments from Press and pulpit attacking the party system. Many of us are disposed to believe—or perhaps not disposed, but bullied into accepting—that the party system is evil, or that it has dominantly evil characteristics. In practice, the party system is the only instrument by which the people of the country can have a say not only in whom they elect, but in the conduct of affairs when Parliament returns after the election.
We do not print party labels on the ballot papers which is preserving the myth that the parties do not exist. Mr. Speaker would not permit HANSARD to mention a party label, but in fact it is the party

which gives people a chance not only to vote for an hon. Member opposite, but to vote for his right hon. Friend the Prime Minister; not only for an hon. Member on this side of the House, but for the Leader of the Opposition. It is through the party system that they vote for a team and exercise a real influence over the conduct of affairs.

I think that the effect of the hon. Gentleman's proposed Bill, if it became law, would be to encourage the least unpopular man to be elected in a constituency. There would be a movement towards the centre which would weaken the basic alternative choice which is the real advantage under a party system. The fallacy that independent Members do not get into the House is denied as we look around and see my hon. Friend the Member for Ebbw Vale (Mr. Foot), the right hon. Member for Wolverhampton, Southwest (Mr. Powell) and, indeed, the hon. Member for Carlisle himself. They do get into the House of Commons and the party system does not deny us the right of independent members.

There are also other disadvantages and although I sympathise with the intention of the hon. Gentleman in introducing his Motion I think that he should seek the remedy with his own party. He should try to introduce a little more democracy into his local Conservative association rather than seek the remedy which he is advocating.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 20, Noes 137.

Division No. 99.]
AYES
[4.4 p.m.


Baxter, William (Stirlingshire, W.)
Gurden, Harold
Mallalieu, E. L. (Brigg)


Bowen, Roderic (Cardigan)
Holt, Arthur
Noel-Baker, Rt. Hn. Philip (Derby, S.)


Cooke, Robert
Hooson, H. E.
Wade, Donald


Delargy, Hugh
Hughes, Hector (Aberdeen, N.)
Williams, W. T. (Warrington)


Dodds, Norman
Jennings, J. C.



Fernyhough, E.
Jones, Rt. Hn. A. Creech (Wakefield)
TELLERS FOR THE AYES:


Foot, Michael (Ebbw Vale)
Lewis, Arthur (West Ham, N.)
Dr. Johnson and Mr. Thorpe.


Grimond, Rt. Hon. J.
Lubbock, Eric





NOES


Bacon, Miss Alice
Black, Sir Cyril
Burden, F. A.


Barter, John
Blackburn, F.
Butler, Mrs. Joyce (Wood Green)


Beamish, Col. Sir Tufton
Boston, T.
Chapman, Donald


Bence, Cyril
Bourne-Arton, A.
Clark, William (Nottingham, S.)


Biffen, John
Bradley, Tom
Cleaver, Leonard


Bingham, R. M.
Brewis, John
Cole, Norman


Birch, Rt. Hon. Nigel
Bromley-Davenport, Lt.-Col. SirWalter
Cooke, Robert




Costain, A. P.
King, Dr. Horace
Robertson, John (Paisley)


Crosland, Anthony
Kitson, Timothy
Rodgers, John (Sevenoaks)


Cullen, Mrs. Alice
Lee, Frederick (Newton)
Roots, William


Dalyell, Tam
Lee, Miss Jennie (Cannock)
Royle, Charles (Salford, West)


Dance, James
Legge-Bourke Sir Harry
Shinwell, Rt. Hon. E.


Davies, Harold (Leek)
Lilley, F. J. P.
Slikin, John


Digby, Simon Wingfield
Lindsay, Sir Martin
Silverman, Julius (Aston)


Doig, Peter
Lipton, Marcus
Skeffington, Arthur


Donaldson, Cmdr. C. E. M.
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Slater, Mrs. Harriet (Stoke, N.)


Doughty, Charles
Mabon, Dr. J. Dickson
Small, William


Ede, Rt. Hon. C.
McBride, N.
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Eden, Sir John
MacColl, James
Smyth, Rt. Hon. Brig. Sir John


Edwards, Walter (Stepney)
MacDermot, Niall
Snow, Julian


Elliott, R. W. (Newo'tle-upon-Tyn, N.)
MacKenzie, J. G.
Stevens, Geoffrey


Errington, Sir Eric
Maclean, SirFitzroy (Bute&amp;N. Ayrs)
Stewart, Michael (Fulham)


Farr, John
Manuel, Archie
Stoddart-Scott, Col. Sir Malcolm


Ginsburg, David
Mapp, Charles
Stones, William


Glover, Sir Douglas
Marsh, Richard
Swain, Thomas


Grant-Ferris, R.
Matthews, Cordon (Meriden)
Swingler, Stephen


Hale, Leslie (Oldham, W.)
Maude, Angus (Stratford-on-Avon)
Tapsell, Peter


Hannan, William
Mawby, Ray
Taylor, Sir Charles (Eastbourne)


Hart, Mrs. Judith
Maxwell-Hyslop, R. J.
Taylor, Edwin (Bolton, E.)


Herbison, Miss Margaret
Mendelson, J. J.
Temple, John M.


Hiley, Joseph
Millan, Bruce
Thatcher, Mrs. Margaret


Hilton, A. V.
Montgomery, Fergus
Tomney, Frank


Holman, Percy
Moody, A. S.
Touche, Rt. Hon. Sir Gordon


Hopkins, Alan
More, Jasper (Ludlow)
Turner, Colin


Hornsby-Smith, Rt. Hon. Dame P.
Morrison, John (Salisbury)
Turton, Rt. Hon. R. H.


Howard, Hon. G. R. (St. Ives)
Nicholson, Sir Godfrey
Vane, W. M. F.


Howard, John (Southampton, Test)
Noel-Baker, Francis (Swindon)
Walker, Peter


Hunter, A. E.
Oakshott, Sir Hendrie
Watkins, Tudor


Hurd, Sir Anthony
O'Malley, B. K.
Willey, Frederick


Hynd, H. (Accrington)
Oram, A. E.
Williams, Dudley (Exeter)


Irvine, Bryant Godman (Rye)
Pannell, Charles (Leeds, W.)
Wilson, Geoffrey (Truro)


James, David
Pargiter, G. A.
Woollam, John


Johnson, Eric (Blackley)
Plckthorn, Sir Kenneth
Yates, Victor (Ladywood)


Jones, J. Idwal (Wrexham)
Pounder, Ration



Kelley Richard
Price, David (Eastleigh)
TELLERS FOR THE NOES:


Kershaw, Anthony
Proudfoot, Wilfred
Mr. Wedgwood Benn and


Kimball, Marcus
Reynolds, G. W.
Mr. Howie.

Orders of the Day — FINANCE BILL

Further considered in Committee.

[Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

New Clause.—(TAX TREATMENT OF RECEIPTS AND OUTGOINGS ON SALE OF LAND.)

(1) Where by virtue of a contract for the sale of an estate or interest in land there falls to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which becomes due after the making of the contract but before the time to which the apportionment falls to be made, and a part of the receipt is therefore receivable by the vendor in trust for the purchaser or, as the case may be, a part of the outgoing is paid by the vendor as trustee for the purchaser, the purchaser shall be treated for the purposes of tax under Case VIII of Schedule D as if that part had become receivable or payable on his behalf immediately after the time to which the apportionment falls to be made.

(2) Where by virtue of such a contract there falls to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which became due before the making of the contract, the parties shall be treated for the purposes of tax under Case VIII of Schedule D as if the contract had been entered into before the receipt or outgoing became due, and subsection (1) above shall apply accordingly.

(3) Where on the sale of an estate or interest in land there is apportioned to the vendor a part of a receipt or outgoing in respect of the estate or interest which is to become receivable or be paid by the purchaser after the making of the apportionment, then for the purposes of tax under Case VIII of Schedule D—

(a) when the receipt becomes due or, as the case may be, the outgoing is paid, the amount of it shall be treated as reduced by so much thereof as was apportioned to the vendor;
(b) the part apportioned to the vendor shall be treated as if it were of the same nature as the receipt or outgoing and had become receivable, or had been paid, directly by him immediately before the time to which the apportionment is made and, where it is a part of an outgoing, had become due immediately before that time.

(4) Any reference in subsection (1) or (2) above to a party to a contract shall include a person to whom the rights and obligations of that party under the contract have passed by assignment or otherwise.

(5) This section shall apply as respects tax under Case VI of Schedule D in a case falling within section 15(4) (furnished lettings) of the

Finance Act 1963 as it applies as respects tax under Case VIII of Schedule D in other cases.—[The Solicitor-General.]

Brought up, and read the First time.

4.11 p.m.

The Solicitor-General (Sir Peter Rawlinson): I beg to move, That the Clause be read a Second time.
In the 1963 legislation, as the Committee will recollect, we introduced Case VIII of Schedule D, which is the new head of charge for rents and other income from land. Difficulties have arisen over the charge of tax where rents and outgoings are apportioned on a sale, and this new Clause is designed to deal with those difficulties. It was foreshadowed by my hon. Friend the Financial Secretary, in his speech on Second Reading, when he said that the Case VIII legislation did not take into account apportionments of rent payable for a period overlapping the date of sale of a property. Without the new Clause the present law would be that the rents for periods in which the apportionment date falls are taxable partly on the wrong person and outgoings are only partly allowed as deductions for tax purposes.
This new Clause, therefore, is designed to enable liability to Income Tax under Case VIII to be appropriately adjusted as between the vendor and the purchaser. The Clause applies only to sales of an interest in land where the interest carries income which is assessable under Case VIII of Schedule D and the sale requires income or outgoings for a period to be apportioned between the vendor and the purchaser. The present law is that, where there is a contract for sale, it creates a trustee relationship between the vendor and the purchaser which ends with the completion of the transaction, that is, with the sale. It applies in different circumstances according to whether the rent is in advance or in arrear.
I will now introduce the gentlemen to whom I referred the other day, Messrs. A and B, as perhaps that will explain the matter more clearly. If there has been a contract by A to sell to B with completion on 1st May, 1965, and that contract is made before 25th March, 1965, and provides for apportionment of rent, as is usual, the effect is that A would hold the appropriate part of the instalment of rent payable in advance on 25th March on


trust for the purchaser, B, so that B is beneficially entitled to the part apportioned to him.
The tax liabilities of A and B in that case would take that apportionment into account. But if the contract is made and entered into after A has received the instalment due in advance on 25th March, 1965, that contract cannot alter the fact that A received the whole of the rent beneficially for himself and, as the law stands, A is taxable on it in full under Case VIII, which, as the Committee will appreciate, he should not be.
4.15 p.m.
Broadly, as the law stands at present, it goes wrong, first, where receipts or outgoings are payable in advance and received or paid by the vendor before the contract is entered into. The second case where it goes wrong is where receipts or outgoings are payable in arrear and received or paid by the purchaser after completion. The new Clause provides that the Case VIII charge to tax shall apply properly to the vendor and purchaser where there have been apportionments. The Clause appears complicated on the Notice Paper. It would correct a minor but important gap in the 1963 legislation. The principles have met with the agreement of the professional bodies which have been consulted.

Mr. Graham Page: This Clause seems to be calculated to confuse. It has certainly left me bewitched, something or the other, and bewildered. I should like, first, to refer to some words that I do not understand. The Clause speaks only of a sale, and my right hon. and learned Friend spoke only of a sale, but are apportionments of the lease excluded, and does the Clause apply only if there is a sale?
We find in the second line the words
a receipt or outgoing…".
My right hon. and learned Friend spoke only of rent, but on the occasion of a sale there are other receipts and outgoings that are apportioned. One normally apportions the general rate, the water rate and the insurance premium as well as the rent, and it seems to me that when referring to receipts and outgoings the Clause includes the other normal apportionments of a completion of sale or purchase.
Turning to the fourth line, we have the phrase
…the time to which the apportionment falls to be made…'".
It is that little word "to" that puzzles me. Does it mean the time at which the apportionment is made—that is, the time of completion of the sale—or does it mean the time to which a payment has been made? For example, if the rates in my right hon. and learned Friend's case were paid for the half year from March to September, is the time to which the apportionment falls to be made September, or the date of completion in May? The phrase confuses me, and I hope that my right hon. and learned Friend will be good enough to explain what it means.
The Clause seems to divide a simple process into a number of subsections, each of which becomes a little more confusing as one reads it. I have made an effort to reduce the Clause to two lines, and perhaps my right hon. and learned Friend will tell me whether, briefly, it really means, "For the purpose of Case VIII of Schedule D the net result of apportionment of receipts and outgoings on the sale of land shall be treated as income or as an allowance against income of the payee and payer respectively." I believe that this whole page of print could be reduced to those few words.

Mr. Douglas Houghton: Until I heard the hon. Member for Crosby (Mr. Graham Page), the Solicitor-General had held me captivated and fully convinced, but now my first question is whether this provision is appropriate to Scottish law or only to English law. I have no knowledge of any difference that might apply, and I am directed to ask the question by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).
I can see the point of this Clause. It was quite clearly explained by the Solicitor-General that there is a gap in the earlier legislation, and it is really a question whether this wording does, and does completely and satisfactorily, what the Solicitor-General explained to the Committee it is intended to do.
I was a little puzzled by the word "to", but thought that it was a word that covered a period of time rather than one


that defined the time at which the contract would be completed. Not being a lawyer, I cannot say whether "to" or "at" is the right word. I am sure that the Government want to get it right this time, as there was an omission in the earlier legislation. If all the adequate consultations have taken place with those who advise on these matters, the Committee will, as far as one can judge, have to take the version of the Solicitor-General on trust.

The Solicitor-General: I am advised that this new Clause fits into the framework of Scots law, and that no Scottish adaptations are needed. I am also advised that the Law Society of Scotland has approved the Clause in principle.
My hon. Friend the Member for Crosby (Mr. Graham Page) has, in the language he used, expressed perfectly competently the principle of the Clause in general terms, but in all such matters it is very difficult to reduce to one or two sentences the effect of a complicated provision of Revenue law. While, therefore, I would say that my hon. Friend is quite right in his general assessment of the effect of the Clause, I can assure him that it is necessary, unfortunately, to have as much matter as appears in the Notice Paper.
My hon. Friend referred to the word "to". The date to which the apportionment is made is the date dividing the period in respect of which the payment is due, that is to say, the date that divides the part of the period for which the vendor is entitled to the rent from the part for which the purchaser is entitled to the rent. Subsection (1) expresses in statutory form what has previously been case law in regard to the trustee relationship between vendor and purchaser.
Perhaps an example might assist my hon. Friend. If, on 1st January, 1964, A contracted to sell to B, with completion on 1st May, land which was let with payment of rent in advance on each quarter day, and if on 25th March, A received that rent in advance, he holds it in trust for B so far as it is apportioned to the appropriate period, which is 1st or 2nd May, 1964, to 24th June, 1964—up to the quarter day.
Subsection (2) refers to rents or outgoings—my hon. Friend is quite right

to mention outgoings—rent received and outgoings payable, when they are received or paid in advance, before the contract. Subsection (2) provides for the parties to be treated as if the contract were entered into before the rent or outgoings fell due, and, therefore, they can be treated in the same way as under subsection (1).
Subsection (3) applies where receipts and outgoings are receivable or paid after completion. It provides, as the Committee can see, uniform rules, first, for the amount of the receipt or outgoing to be reduced by so much as is apportioned to the vendor and, secondly, for the amount to be treated as a revenue receipt or payment by the vendor at the time of the apportionment. I can, therefore, assure my hon. Friend and the Committee that the new Clause does as in sets out to do, which is to close the gap that has been referred to.

Mr. Graham Page: Before my right hon. and learned Friend sits down, can he say whether this includes a letting as well as a sale?

The Solicitor-General: Yes, it includes a sale of a leasehold interest.

Question put and agreed to.

Clause read a Second time and added to the Bill.

New Clause.—(PURCHASE TAX: 15 PER CENT. RATE REDUCED TO 7½ PER CENT.)

Subject to any order of the Treasury made after the passing of this Act under section 39 of the Purchase Tax Act 1963, all goods hitherto to chargeable to purchase tax at the rate of 15 per cent. shall be chargeable at the rate of 7½ per cent. and no more; and accordingly Part I of Schedule I to that Act shall be amended by substituting for any reference to a rate of 15 per cent. a reference to a rate of 7½ per cent.—[Mr. Jay.]

Brought up, and read the First time.

4.30 p.m.

Mr. Jay: I beg to move, That the Clause be read a Second time.

The Chairman: It will also be possible to debate, at the same time, the new Clause 2:
Subject to any order of the Treasury made after the passing of this Act under section 39 of the Purchase Tax Act 1963, all goods hitherto chargeable to purchase tax at the rate of 10 per cent. shall be chargeable at the rate of 5 per cent. and no more; and accordingly


Part I of Schedule I to that Act shall be amended by substituting for any reference to a rate of 10 per cent. a reference to a rate of 5 per cent.
If it is desired, there will be a Division on both of these new Clauses.

Mr. Jay: These clauses raise a rather simpler and larger point which, I hope, is easier to understand than the one which we have just been discussing. We are proposing here that there should be some reduction in at any rate the lower rates of Purchase Tax. The Bill is so drafted that we are compelled to discuss a single rate of Purchase Tax relating to all the items which come under that particular rate. Therefore, in order to discuss the individual items it is necessary to put down a rather sweeping Amendment of this kind.
I must say to the Chief Secretary to the Treasury that he cannot answer this debate with any cogency by saying that if these reductions are made on all these items the total would add up to a loss of revenue of £100 million, or some such sum, because he must realise that it would not be in order to take selectively those items which we regard as of first priority for reduction.
The Committee should look at Purchase Tax and at least investigate what is happening on this occasion, which is about the only occasion we have in the year for doing so. We should look at it if only because it has now become one of the most important taxes in the whole of our fiscal armoury. When hon. Members opposite were in opposition they used to tell us that they would abolish Purchase Tax almost entirely, or at least that it would remain on only a few luxury items, and we were given the impression that it would cease to be an important revenue-raiser. That promise from the party opposite has gone the way of all flesh, like most of their pre-election promises. So far from Purchase Tax having been abolished or contracted, it has expanded over a vast scale in recent years.
It is not merely that total revenue has risen, but it has been, in addition, extended to a whole lot of items, mainly essential elements of family consumption which were previously exempt. It was extended two years ago—and this is relevant to the rates in the first new Clause—to soft drinks, chocolates, confectionery

and sweets. We shall have something to say about that in the debate.
Also in recent years—and this is relevant to the other rates in the second new Clause—it has been extended to a vast range of clothes, furniture, boots and shoes and a number of household textiles which, in the period previous to 1951, were all exempted under the utility schemes of those days which covered more than 50 per cent. of these essential items in the consumption of the ordinary family.
We have had, therefore, a great extension of Purchase Tax not merely in terms of revenue, but in terms of the goods actually covered. I do not think that the Chief Secretary or the party opposite would deny or conceal that it is part of their whole policy of extending the range of indirect taxation to a number of items of general consumption not previously covered. In fairness, it should be said that the Chief Secretary is fond of saying that this is not so and that hon. Members opposite are following no such policy, because if we take indirect taxation and direct taxation as a percentage of total revenue and compare the percentages now with those of 1950 we shall find that indirect taxation has not risen as a percentage of the total.
The right hon. Gentleman may prove that if he includes insurance contribution as a form of direct, taxation. It can be shown that direct taxation has risen markedly and that even the percentage has risen in its favour. Even if one leaves out the insurance contribution one can reach that conclusion, but if we are not merely comparing direct and indirect taxation but progressive and regressive taxation, which would include both indirect taxation like Purchase Tax and also the insurance contributions, we would discover that the reality of this is that regressive taxation has increased as a proportion and that the right hon. Gentleman's percentages are not more than a form of trick to support his argument of the moment.
If we look more narrowly at Purchase Tax alone, it is a striking fact that total revenue—and there is no change of tax in this year's Budget—is rising at the moment a good deal faster than national money income. I imagine that the Chief Secretary accepts the Financial Statement of the Financial Secretary, which


shows that the increase this year in Purchase Tax revenue from last year's Budget estimate to this year's Budget estimate is from £545 million to £605 million in one year. This is an increase of much more than 10 per cent. in Purchase Tax revenue alone in one year, and I think that the right hon. Gentleman would not claim that the national income, even in money terms, will increase by more than 10 per cent. in the financial year in which we now find ourselves.
Purchase Tax has now risen to a level at which, barring tobacco, which we always have to bar, it is very nearly our most important single indirect tax. It is to raise in the coming year practically as much revenue as the oil taxes and more than double the total revenue from beer. Therefore, this has become a very formidable tax.
The point to which the Committee ought to direct its attention is that in so far as we go on raising indirect taxation year after year on all these articles of staple consumption of the ordinary family we are steadily raising the level of the cost of living. Since it is done by deliberate Government policy, in doing that we are automatically making it harder to achieve the incomes policy which the Government are always preaching, but which, in my opinion, we shall never achieve unless the Government are themselves following a policy of social justice both in taxation and in terms of other income.
There is no doubt that this wide increase in the range of Purchase Tax has helped to put up the cost of living in recent years. This means in the next round that by forcing up wage rates it tends to raise the price of exports and makes them more difficult to sell. We have had long and complicated discussions about possible ingenious export subsidies, such as the Gordon Richards Committee considered in connection with Purchase Tax and a sales tax, but we sometimes forget that one fiscal method of assisting our exports without infringing G.A.T.T. is to keep down the level of taxation on articles of ordinary consumption.
In this Budget, quite apart from this tax, we have had in the background taxes on beer and tobacco pushed up in

such a way as to raise the cost of living by nearly one point. Therefore, in all these ways, present Government policy is tending to raise prices and the cost of living.
The right hon. Gentleman has argued, as the Chancellor has argued, that he was compelled to do this this year because, if he had taken the alternative of raising Profits Tax—which I do not accept as an alternative—the revenue would not have been available till the following year. I do not accept that argument, and I shall not discuss it at length now, but I ask the right hon. Gentleman to consider for a moment where the argument leads if one is prepared to accept it. If we are to have an expanding economy, advancing year by year, with a high level of incomes, and if we are always to be told that. we cannot have restraint through the Profits Tax because it operates only next year, we shall have to increase indirect taxes every year.
This follows from the arguments produced by right hon. Gentlemen opposite, and I do not think that it is a very comforting or encouraging prospect. If we are to continue on that line, we shall make an incomes policy more and more difficult and throw an ever growing burden on our exports. It is of interest that, in the years during which this policy has been pursued by the Government, British exports, as we all agree, have been continually lagging.
By these two new Clauses, we ask the Committee to examine in particular the 15 per cent. and 10 per cent. rates of Purchase Tax. The 15 per cent. rate, which we suggest should be reduced by half, covers the chocolates, confectionery, sweets, soft drinks and ice cream which were all brought first into the range of taxation by the Government opposite two years ago. Here again, since we are confronted with the present Government's action in putting a tax on certain important foodstuffs, for virtually the first time in this country, through the Finance Bill and the normal fiscal machinery, it is right to point out that our Minister of Agriculture, Fisheries and Food—sometimes he forgets that he is Minister of Food—is introducing at the same time what he calls the new agricultural policy, by which he is simultan-


eously placing new taxes under the name of import levies on some of the more important foodstuffs consumed by the population.
It so happens that today, the very day on which we are discussing this question, the Minister of Agriculture, Fisheries and Food has announced some new levies on wheat imported into this country. This is yet another action tending to raise the price of food and to raise the cost of living for the British people. I do not know whether it is all part of the plan to harmonise our system with that of the Common Market countries or whether the Government really think that it is all justified on merit. Perhaps the right hon. Gentleman will give us some guidance on that.
The 10 per cent. rate of Purchase Tax, which is dealt with in the second new Clause, covers the most important items of all which enter into the general consumption of the ordinary family, the great bulk of clothing, boots and shoes, furniture, household textiles, carpets, linoleum and what I think the Customs and Excise usually call floor covering. These are all, of course, extremely important items in the weekly cost of living of the ordinary working family. They all bear tax now, whereas the great bulk of them were tax-free 15 years ago.
I put this point in particular to the right hon. Gentleman. Even leaving aside the effect of this new taxation on the ordinary cost of living, there seems to be evidence that the introduction of the tax at the 15 per cent. rate on the ice cream industry was too sudden and abrupt from an industrial point of view, quite apart from the effect on the consumer. According to my information, during the 18 months or two years since the tax has been effectively in operation, no fewer than five factories have closed down altogether in the ice cream industry and as many as 1,600 people have been dismissed.
Was this what the Government really intended? When they introduced this particular tax, did they intend to deal a blow of that severity at this industry, or was this an unintended effect which they never meant to produce but which turned out that way contrary to their expectations? If it is the latter, this is the occasion for taking amending action

to modify the severity of the blow. We should like to know whether that was the effect which the Government intended to produce, or whether they made a mistake and would now wish to come clean and repent of the consequences of their actions.
4.45 p.m.
To sum up, I believe that we have gone too far in extending the range of taxation on these basic items which enter into the ordinary consumption of the people. The right policy should be that all foodstuffs should be exempt from any form of indirect taxation whatever and that other basic necessities, if they are not totally exempt, should bear a very low rate of taxation. When a Labour Government come to reform these matters, as, no doubt, they will soon, after the right hon. Gentleman has sung, his swansong today, one high priority for tax concessions, I believe, will be in some of these indirect taxes on necessities of ordinary consumption.
For this there is a powerful argument from the point of view of social justice and more equality in real standards of living. There is also a powerful argument from the standpoint of the vital objective of keeping down living costs and preventing the too rapid rise of price levels. Above all, from the point of view of immediate economic policy and our immediate economic difficulties, I believe that such a policy would have great value in making it more practicable to achieve some form of coherent and comprehensive incomes restraint, thereby assisting the essential development of our exports on which so many of our economic fortunes depend.

Dr. Horace King: I share the concern expressed by my right hon. Friend the Member for Battersea, North (Mr. Jay) about the growth in yield of the Purchase Tax this year and the fact that it has already reached over £600 million, increasing this year by £1 per head of the population.
I am one of those who hoped that, over the years, the incidence of Purchase Tax would steadily decrease. When we introduced it during the war, it had an economic purpose; it was a disincentive to spending. Goods with


Purchase Tax on them were more expensive and people would be less inclined to buy them. We did not want people to buy goods because we wanted to make goods for the war effort. Even if they did buy goods which were expensive because of the Purchase Tax, according to "Boyle's Law", they would not have money left to buy other things. The main purpose of the Purchase Tax was economic then. Its revenue raising aspect in war time was incidental. It was one of the instruments for winning the war.
I was one of those who hoped that, in the post-war years, the Purchase Tax would, following Lenin's prophecy about the State, wither away. I am alarmed to find that, this year, far from withering away, it has been like Stalin's State and become more and more ruthless and more and more powerful. The most serious fact which the Committee has to consider now is that the original economic purpose of the Purchase Tax has gone into the background, unless the Chief Secretary can tell us that he still wants to discourage people from buying goods, and the tax has now become vital to the Treasury, so vital that it seems almost as though this incubus is to be round our necks for all time unless we halt the process now going on. As my right hon. Friend the Member for Battersea, North has pointed out, the range has got wider.
We are not talking about Purchase Tax on luxuries. We are talking about Purchase Tax on many articles which are vital to the housewife. There are two kinds of tax. We tax the citizen more or less according to his capacity to pay, and we tax him on a flat rate, whatever his income. I link this to the taxes which we levy when we make people pay for their insurance benefits—their poll taxes. The millionaire and the poorest person pay exactly the same poll tax, just as they pay exactly the same increased tobacco duty.
Purchase Tax is a poll tax, although not purely so because people do not have to buy goods with Purchase Tax on them. Concerning the essential range of goods which we are talking about in these two new Clauses, we are taxing the richest housewife in exactly the same way as we are taxing the poorest housewife. This

is only part of the pattern of the present Government which we can see elsewhere. They shift on to the poorer people burdens which ought to be put upon the shoulders of those most capable of carrying them.
The next Government will have to consider the fact that our system of national taxation and rating is becoming more and more inequitable and more and more regressive. I hope that when the next Government come to power they will examine the whole question of Purchase Tax and see whether they can halt the process, into which we have slipped in these past few years, of steadily increasing the yield of the tax and, in that way, adding to the burden borne by all people, whatever their income. If the Minister cannot accept the Clause entirely, I hope he will consider seriously whether he can accept it in respect of some of the goods which come within the 10 per cent. Purchase Tax category dealt with in the first new Clause.

Mrs. Harriet Slater: Once again, we are discussing the question of Purchase Tax and how heavily Purchase Tax falls on the poorer people. I would say to my hon. Friend the Member for Southampton, Itchen (Dr. King) that those of us who are in the Cooperative movement thought, when Purchase Tax was introduced, that it was wrong. We thought that if we wanted to stop people buying goods they should not have been produced in the shops. However, since its introduction it has been a very successful source of revenue for the Treasury, which has put it on more and more things.
The tax on sweets, chocolates, soft drinks, ice lollies and chocolate-covered biscuits was the first instance of the Government introducing a tax on food. They may argue, as they argued last year, that the tax was put on luxury food, but these things are not luxuries to children who spend their twopences and threepences—it used to be halfpennies and sometimes farthings with us—on them and have to pay tax on them.
The danger of this tax is that it may not stop at these kinds of food. It may be put on other foods. I thought last year that this was, and I still think that it is, a very unfair tax. Last year it looked almost as though it was a tax


introduced by a desperate Government looking where they could get a few more pounds. The people interested particularly in soft drinks are extremely worried about the effect which the tax has had on at least some of the smaller firms in the trade. This is one respect that the Government might have another look at.
I now turn to consider the tax on other goods. In the booklet of the Customs and Excise duties there is a great variety of articles which one could argue should be exempt. In Group 1, a tax is put on certain articles, but exemption is given to garments and footwear of a kind suitable for young children to wear. I have raised this issue before, and I raise it again. A mother with a child who is growing is forced to pay tax on shoes for that child, although children's shoes are exempt. Next door to me there is a little girl who is about 10½ years of age and who takes a larger size in shoes than I take—and my shoe size is not small.
Members who have children, particularly those whose children are going to secondary modern or grammar schools, or, as applies to hon. Members opposite, to public schools, find that because their children are getting taller, and, therefore, have larger feet, they are having to pay this tax. The Chancellor of the Exchequer told me that this was a difficult matter because some women would wear the large children's shoes. Some "modern misses" might wear "flatties", but, generally, one can tell a child's shoe from a woman's shoe. This is another case which the Treasury might consider.
We had the famous "pots and pans" Budget, when a tax was put on the tools which the housewife uses. That tax has never been taken off. I come from the district where pots are made. The industry has always felt aggrieved that, although a tremendous amount of effort has been put into turning out well-designed and good quality china products and building up a valuable export market, it should be penalised by this tax on pots. Nearly everything which a woman uses for cooking bears Purchase Tax—even the wire tray on which she cools her cakes after baking them. It is put on almost all kitchen ware and utensils because they are not used in trade.

The butcher's knife is exempt from tax, but the housewife's carving knife is not.
The Government profess to believe in helping young married people and in encouraging them to have comfortable homes. Yet all the furniture which they have to buy and household commodities, such as linoleum and carpets—I regret that the hon. Member for Kidderminster (Sir G. Nabarro) is not here today to help us out—and even wallpaper bear tax. If the Government really mean to encourage young people to have nice things in their homes and to furnish them properly—and everybody has the right to that; this is not something which should be restricted to those who can afford it—how foolish it is to put a tax on these things.
5.0 p.m.
Young people are encouraged to pursue leisure time activities which will be useful to them. This is a matter which the right hon. Gentleman might look at with his right hon. Friend the Home Secretary if he wants to encourage local authorities to spend more money on youth clubs and leisure time activities so as to overcome some of the problems that confront us today. If I am interested in youth club activities, netball and so on, and, to encourage its members, I desire to buy a cup, I pay Purchase Tax on it, but if, by showing a little common sense, I buy a shield or plaque for them, I do not pay tax on it.
How ridiculous it is that to encourage team spirit and service to the community in our schools, youth clubs and other organisations I should have to pay tax on a cup as a trophy, but when I buy a plaque or shield I am exempt from paying 10 per cent. Purchase Tax on it. The right hon. Gentleman might say that it is not very much, but it all adds up when someone is encouraging schools, youth clubs or other organisations to pursue activities which would be of benefit to the country.
We should at least wipe out some of the silly distinctions that apply today. This is a case which we should look at again, especially as we are continually told that we are living in an affluent society.

Mr. William Clark: I suppose that everyone has a certain amount of sympathy for both


new Clauses in that they attempt to reduce taxation. That is something for which one can always get a certain amount of sympathy, but I think that the Committee should not be misled about what it is being asked to do. If these Clauses were passed, I understand that the cost would be about £140 million a year. This, I would have thought, does not bear out the speeches made by the Opposition during the Budget debate that the Chancellor had in fact been a little too optimistic about the economic possibilities of this country and that he should have been a little more stringent in increasing taxation.
We cannot on the one side ask for an increase in taxation and on the other ask for a reduction in taxation of £140 million. I am astounded that the hon. Member for Battersea, North (Mr. Jay) lent his name to these two new Clauses because he and his hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) heavily and unfairly criticised the Chancellor during the Budget debate for being too optimistic.
Hon. Members opposite talk about indirect and direct taxation. I am sure that the hon. Member for Sowerby (Mr. Houghton) will remember that recently he wrote:
A tax system suited to the affluent mass production economy of the second half of the twentieth century is almost bound to rely more and more upon indirect taxation.
If this is so, I cannot see how the hon. Member for Sowerby can lend his name to Clauses such as this to reduce indirect taxation by £140 million.

Mr. Houghton: There are other fields of indirect taxation besides Purchase Tax. This extract from what I wrote has been quoted several times. It was a well-balanced article on taxation and if hon. Members who quote from it will read all of it they will see that it is a well-balanced article. There are directions in which, I believe, future Governments will have to rely on an extension of indirect taxation, and one of them has been under consideration by the Government recently, namely gambling. There are other fields in which there is a considerable amount of disposable income being spent, not on luxuries or on necessities, which

might provide a source of revenue to the Exchequer. Certainly, in indirect taxation there is an element of choice as to how we pay our taxes which there is not in direct taxation. [Interruption.] The hon. Member quoted me and now he must listen to my intervention. If in this field the burden of taxation is not harsh and it does not bear on the necessities of life, I see no objection to the extension of indirect taxation.

Mr. Clark: I am sure that the Committee is grateful for that intervention, or speech, particularly the Tory philosophy that seemed to be inherent in the hon. Gentleman's statement that it is much better to tax the spending end rather than the earning end. That is precisely what the Chancellor has done this year in his increase of £100 million taxation.
I would ask hon. Members opposite what they would do if they think that the Chancellor is far too optimistic in this year's Budget in that he has not claimed back sufficient taxation from the tax-paying public. If they are prepared to give £140 million in relief under these two Clauses, perhaps they would tell the Committee, and particularly the country, from where they intend to get £140 million. Surely we are entitled to know. It is all very well for hon. Members opposite to say, "You must reduce Purchase Tax by this, increase this allowance and reduce that", but if we are to keep the country going roughly at the same cost at which it is run at the moment and we reduce one tax we have to increase another. I would ask the categoric question: will someone on the Front Bench opposite give me a clear, not an ambiguous, answer as to where the Opposition would get the £140 million in substitution for the reduction of £140 million as proposed in these two Clauses?
If it is to go on direct taxation, presumably it has to go on P.A.Y.E.—the ordinary worker. If it does not go on the worker, will it go on companies or profits tax? Will it penalise our exporters more? It does not matter which philosophy the party opposite want to put over, but I think that the public are entitled to know what economic taxation they would impose if they ever got into power.
There is one other thing which we should remember when talking about Purchase Tax. We are at the moment talking about Purchase Tax in the range bracket of 25 per cent., 15 per cent. and 10 per cent. It was slightly different in 1951 when the financial wizards on the Opposition Front Bench were in charge of the finances of this country and when Purchase Tax was 100 per cent., 66⅔ per cent. and 33⅓ per cent I should have thought, Mr. Arbuthnot, that it was a little ungenerous and unfair of hon. Members opposite to criticise the Government on their record concerning reduction in Purchase Tax. I should like to give three other figures, Mr. Arbuthnot, if I may.

Mr. Victor Yates: Sir John—not Mr. Arbuthnot.

Mr. Clark: I am sorry. I get so excited when I try to fathom the economics of the Opposition that quite often I get terribly tongue-tied and I forget whom I am talking to but not necessarily what I am talking about. There has been a certain amount of criticism of indirect taxation, but I think that for the purpose of the record, and, I hope, to help some hon. Members, it would be as well to know what percentage is taken in indirect taxation of the gross national product.
In 1946, 14·8 per cent. of the gross national product was taken in indirect taxation. As the hon. Member for Sowerby will agree, his party were responsible then for the country's finances. The party opposite made an improvement. They do not like indirect taxation, because, as they say, it operates unfairly against the poorer members of the community, for example. By 1951, through their financial wizardry, the party opposite had been able to reduce the percentage from 14·8 to 14·75 of the gross national production, a reduction of 05 per cent.
The record of the Conservative Administration of the last 12 or 13 years is that even with my right hon. Friend's new provisions, indirect taxation takes only 11·5 per cent. of the gross national product. This gives the lie to Opposition accusations that Conservatives have not done much for the ordinary people.

Mr. Houghton: Does not the hon. Member recognise the difference between indirect taxation used in conditions of economic stringency, as occurred on consumption, and indirect taxation used as a revenue tax? Immediately after the war, Purchase Tax was a weapon avowedly used for economic and not for revenue purposes. The position today is entirely different.

Mr. Clark: I hope that I have not misled the Committee in speaking only about what happened immediately after the war. I gave the 1946 figure of 14·8 per cent. and the 1951 figure of 14·75 per cent. That was six years after the war. The party opposite is so good at managing and planning the economy that there should have been no stringency six years after the war. Unfortunately, we, of all the nations this side of the Iron Curtain, were living in more austere circumstances than any other Western democracy. That is one fact which the public should not be allowed to forget.
Whilst all of us would like taxation to be reduced, my criticism about the two new Clauses is that we have been given no alternative suggestion about where the money is to come from. Certainly, what the party opposite suggest is not borne; out by their record between 1945 and 1951 because of the figures which I have given. All I can assume is that the two new Clauses are merely electioneering to endeavour to hoodwink the public into thinking that if the party opposite got into power, they would immediately reduce taxation. My guess is that if the party opposite ever got back to power, we would again have the penal taxation that we had between 1945 and 1951.

5.15 p.m.

Mr. Eric Lubbock: Why do hon. Members opposite always assume that arguments about the taxation distribution between 1945 and 1951 are relevant to present-day circumstances? I wish to argue against both of the new Clauses, but I hope that I shall not be as misleading no the Committee and to the electorate as to use that type of argument.
I want to touch, first, upon the point made by the hon. Member for Sowerby (Mr. Houghton) in his intervention when he said that while his party admitted that


indirect taxation might become increasingly important, one had to be careful that it did not bear upon the necessities of life. Certain speeches which have been made from these benches have referred to wallpaper, linoleum, and so on, which, various hon. Members claim, are particularly important. If that were really so, why did not the Labour Party put down an Amendment on the 25 per cent. Purchase Tax rate, which, I understand, covers various necessities of life, such as electric cookers, sewing machines, electric heaters, lamp bulbs, washing machines and many other items of home consumption? What is a luxury to one man is a necessity to another, and vice versa. Who are we in this Committee to say what should be luxuries or what should be necessities and to dictate the spending patterns of the public?
I should like to see a much wider spread of indirect taxation and rates lower than we have at present on the items covered. Certainly, in exceptional cases, social justification can be made for excluding certain items altogether from indirect taxation. It is, for example, iniquitous that we impose a 25 per cent. Purchase Tax rate on toothpaste. The Chancellor of the Exchequer has had a letter on this subject from the chairman of the dentifrice manufacturers' section of the London Chamber of Commerce. This is a tax upon health and it is even more anomalous when one considers that toothbrushes are not subject to Purchase Tax.
I introduce that aspect only to show that the 15 per cent. and 10 per cent. rates which are under discussion are not the only ones in which there are anomalies. If one looked at Purchase Tax entirely from a social viewpoint, one would have to bring in the whole spread of items covered by the tax and, indeed, other items of expenditure which are still excluded from it.
I agree with the hon. Member for Nottingham, South (Mr. W. Clark) that if one is to reduce taxation by, I believe, something like £73 million, if both the new Clauses were accepted—

Mr. W. Clark: £138 million.

Mr. Lubbock: Is not £138 million the total amount of taxation raised by the 15 per cent. and 10 per cent. levels?

Mr. Clark: Mr. Clark indicated dissent.

Mr. Lubbock: I will accept the hon. Member's figures. At least, it is a large sum. One has to say by what means one would raise this amount of taxation if one agrees with the basic premise that the Chancellor had to bring in another £100 million in this year's Budget. This would have entailed a large increase in the rate of Profits Tax, which is the only suggestion I have heard made from the Labour benches. Certainly, we agree that there are loopholes in our direct taxation system. I should like to see a legacy duty, a gift tax, a proper capital gains tax, and so on, but I do not think that any of these would raise the kind of money which we would lose to the Revenue by accepting the two new Clauses. This is one of the main reasons why we shall vote against them.
If, however, we had that kind of money to give away, there would be more valuable things that we could do with it. We should look, first, at the needy and the enterprising. For example, we should look at those in the lower rates of direct taxation and see whether there are not further concessions which could be given there. We should look at a fuel tax, which would help everybody. We should, perhaps, look—and I am certain that we will be looking later—at shifting some of the burden of rates to taxes. There are a good many other things that we could do with this large sum of money.
If one looked at the situation objectively, I do not believe that one would select these two groups of items—soft drinks and confectionery, and boots, shoes, clothes, and so on—as being the first priority. Admitedly, they cover a wide range of items of everyday expenditure, but so does the 25 per cent. Purchase Tax rate.
In all these matters, as the hon. Member for Nottingham, South has pointed out, there is the question of consumer choice. I happen to buy a new suit only once every three years, although I once had the honour of being called well-groomed by the Daily Herald. [An HON. MEMBER: "That was a reference to the hon. Member's haircut."] It may, indeed, have been something to do with my haircut. It is a question of choice whether I go out and buy a new suit or have an electric cooker. To that extent, therefore, one should not try by the taxation


system to control the choice of the consuming public.
We would welcome a spreading of the Purchase Tax network so that we were able to reduce taxation on all the items at present covered. I know that the Government have gone part of the way towards this, but it would be much fairer if one allowed the consumer to have as free choice as possible, with the one exception that there are social items such as toothpaste which should be excluded altogether from the network of indirect taxation. With that one exception, we think that the aim should be the widest possible spread of taxation on consumption at the lowest possible levels.

Mr. A. E. Cooper: If all the new Clauses we are to discuss today were added together, they would cost between £300 and £400 million a year. The hon. Member for Sowerby (Mr. Houghton) and his hon. Friends know perfectly well that in the economic situation now or in the foreseeable future reliefs to that extent are impossible.
Therefore, we can only assume that all the new Clauses are nothing more nor less than blatant electioneering and designed for no other purpose than to give the country the impression that Conservative Members of Parliament—I am happy to hear that the Liberal Party proposes to do the same—who vote against the new Clauses are doing great damage to the country and failing to give necessary reliefs.

Mrs. Slater: Does not the hon. Gentleman realise that my hon. Friends were voting and speaking against this Purchase Tax not in the pre-election year but in the year following the last General Election? Therefore, his attempt to show that this is merely electioneering falls to the ground. It is sheer bunkum.

Mr. Cooper: The hon. Lady may be as abusive as she likes, but she knows that the hon. Member for Sowerby, if sitting on this side of the House as a member of the Government, would resist every new Clause on the Notice Paper tabled by the Opposition. The hon. Lady knows, too, that, far from calling for reductions in tax, he would be doing what Sir Stafford Cripps and Mr. Gaitskell had to do under the Labour Govern-

ment, which was to put taxation up all the time.

Mr. Houghton: The hon. Member is quite wrong in his assumption. If I were sitting on the Government Front Bench now, some of the new Clauses would not have to be resisted because they would be in the Bill.

Mr. Cooper: As a piece of political sophistry, that will probably go down in history. If the hon. Gentleman is really telling the Committee that, he and his party must tell the country what taxation reliefs that we have given would not have been given by them. What would he have substituted for these reliefs? He cannot have his cake and eat it.
The hon. Gentleman knows perfectly well that taxation is already at a very high level and that to put it much higher would seriously undermine incentive and effort and do great harm to our industry and export potential. These are the facts of life. It does hon. Gentlemen opposite no good in the country, having accepted an increase in taxation this year of about £100 million to keep the ship going on an even keel, to come here now and bring forward new Clauses proposing reductions in taxation of £300 to £400 million a year. Who do hon. Members opposite think they are kidding? They are certainly not kidding the electors. I promise hon. Gentleman opposite that after the General Election they will still be sitting on the opposite side of this Chamber.
Let us ask a few pertinent questions of the hon. Member for Sowerby and his right hon. Friend the Member for Batter-sea, North (Mr. Jay). These new Clauses demand £300 to £400 million of new taxation. How will they find it? This question must be spelt out if necessary in capital letters until the right hon. Member for Huyton (Mr. H. Wilson) and his hon. Friends honestly tell the country how they propose to find the money. Will they find it by borrowing?
During the proceedings on last year's Finance Bill the hon. Member for Houghton admitted that the Labour Party would find a lot of these things from extra borrowing. He had better have a word with his right hon. Friend the Member for Battersea, North. Does he not know that an additional £300 to


£400 million of new borrowing would be highly inflationary? What would he do in that situation about old-age pensions, Service pensions and so on? Would he propose new increases in pensions to meet the inflationary situation which the Labour Party's monetary policy had created, or would hon. Members opposite do what they did between 1945 and 1951—rat on the old-age pensioners and give them nothing? The hon. Member for Coventry, East (Mr. Crossman) is on the record over and over again as saying that the Labour Party cheated the old-age pensioners when they were in power. So perhaps we may assume that the Labour Party will have learnt the lessons of 1945 to 1951 and may not go in for a high measure of new borrowing because of its very serious inflationary possibilities.
That being so, what will hon. Gentlemen opposite do about it? Will they raise £400 million in new taxation? Will they increase Income Tax? Will they increase Purchase Tax, the very thing they now want to reduce? Will they increase taxation in other fields? Hon. Gentlemen opposite must realise that they will have to find the £400 million. No one will wave a magic wand and make the £400 million come in through the window. It has to be found either by borrowing or by new taxation. There is no other way in which it can be done except one, and that is to increase the national growth above its present figure of 4–41½ per cent. Are hon. Gentlemen opposite seriously telling the country that if they were in power they could increase the national growth beyond 4½ per cent.

Miss Jennie Lee: Yes.

Mr. Cooper: The hon. Lady the Member for Cannock (Miss Lee) says "Yes", but she should consult her friends in the T.U.C. who are members of the N.E.D.C. and co-operating with the Government in this matter, who know perfectly well that at the moment 4–4½ is the only sustainable percentage of growth. But this is the only means by which the extra money which is necessary could be obtained. I would remind the hon. Lady that the 4–4½ per cent. growth with the taxation which it will inevitably bring to the Exchequer is already bespoken by the far-reaching

development programmes which the Government have introduced for schools, housing, hospitals, universities, roads and so on. Hon. Gentlemen opposite have admitted on no fewer than three occasions in the last few months that they could not do better than we are doing about houses, schools and hospitals. Therefore, where is the great extra growth to come from?

Miss Lee: I do not profess to be an expert economist, but I always respect economists who have a certain amount of humility, and I am certain that if we got a Government who played fairer with the industrial workers, that would make a big contribution to improved production.

Mr. Cooper: I really do not know what that was intended to mean. We were always told "Nationalise the main industries, and you will get magnificent labour relations." So they were nationalised. However, with the exception of the coal mining industry over the last year or two under the very expert administration of Lord Robens, we have had more strikes in nationalised industry than in any of the private sectors of industry. So we do not seem to be getting the magnificent labour relations which hon. Members opposite thought we should.

The Temporary Chairman (Sir John Arbuthnot): The hon. Gentleman seems to be getting rather far away from the subject of the Clause.

Mr. Cooper: I was provoked, Sir John. I apologise.
I should like to say a word directly about the two Clauses that we are considering. Let us not deny that a case can be made out for every single one of the new Clauses individually. The basic reason is that all taxation is bad. Everyone dislikes it and if we could do without any we should do so. But we must have revenue. The State has to be run and a very large sum of money is needed for it. But it is sheer irresponsibility of the highest order on the part of the Opposition to come here today and possibly tomorrow proposing new Clauses which would cost the country between £300 million and £400 million a year without telling us how it would raise the money.

5.30 p.m.

Mr. Merlyn Rees: As the son of a former miner I am sorely tempted to follow the hon. Member for Ilford, South (Mr. Cooper) into the rather foolish argument that he put about the coal industry, but as that would be out of order I will hold myself back. It was an error in his argument equal to his confusion when he ignored the purpose of taxation as being for revenue raising and took the only purpose of indirect taxation as being to control the economy.
The hon. Member also overlooked the fact that the economic situation today is completely different from the economic situation facing us from 1945 to 1951 and that what we need today to obtain a growth of 4½ per cent., which would be considerably greater than the growth we have had in the last 12 years, is completely different from the sort of policy the Labour Government had to follow between 1945 and 1951.
The growth in that period was considerably greater than 4½ per cent. I concede that it was easier to get that sort of growth then because it was following a period of war and the figures are not strictly comparable. It would be better for both sides to get back to the situation as it is today. In supporting this Clause, I want to concentrate my remarks on a constituency interest in soft drinks and ice cream.
I have received representations from a soft drinks firm on behalf of both management and employees. It has been borne upon me by this firm, which is in my constituency, that since the imposition of this tax the turnover is the same but nevertheless 15 per cent. of the revenue has to be paid to the Government. The firm is having to economise on staff and if this financial year is as bad as the last it will have to shut down. For that reason, I bring the matter to the notice of the Committee. The firm tells me that the last financial year was the worst for 60 years.
The director of the firm concerned has given me information concerning five other firms in the wider neighbourhood outside my constituency which have had to shut down. It is surely, therefore, relevant for us to look at this tax to see if it is causing the situation. From

my own investigations I see that there are other reasons for the problems in the soft drinks industry. There has been a growth of what the economist would probably call "economies of scale"—this sort of drink can be turned out more cheaply by larger firms like Schweppes.
I believe, however, that it is not only economies of scale but the tax which is adversely affecting small firms. While I believe it to be inevitable that there should be a growth of large firms in many sectors of the economy, I still believe that there is a place for the small firms in this sort of industry. I put it to the Government that there is evidence that the 15 per cent. tax on soft drinks has adversely affected small firms to a degree where they will be unable to carry on in my constituency.
In the same way it has been borne upon me by small ice-cream men in my constituency that the 15 per cent. tax is affecting them adversely as well. They have put several reasons to me. They say that they now have to keep detailed records. I think that the Government will concede that this may well be quite an imposition on a small firm. They say that this is a constant worry to them and raises many problems. They claim that, because of this, more and more traders are being forced to give up producing their own ice cream and to buy it from wholesalers.
Sometimes I feel that this is what one might call an aesthetic question as well. Wherever one goes to eat, one gets these days the same sort of stuff which is called ice cream. Perhaps this is a sign of growing old but I always feel that the ice cream was better when I was young. Indeed, however, there is some truth in that for it was then made on a smaller scale and not by two vast firms. However, some of the small ice-cream producers in my constituency are being cut out by large-scale producers because of the imposition of taxation.
They go further, however. They say that by the very nature of their trade external influences outside human control affect them adversely. The more I think about that phrase the more stilted it seems, but it was put to me in those words, which might almost have come from a national organisation. However that may be, the tax is affecting them adversely—and not


for the high-falutin' reasons put by the hon. Member for Ilford, South, making comparisons over 20 or 30 years, or for those put by the hon. Member for Nottingham, South (Mr. W. Clark).
I have put simple constituency points. The imposition of the tax is adversely affecting small soft drink firms and small ice-cream producers and I am still sufficiently old-fashioned to regret seeing small firms in this kind of industry going out of business, just as I was pleased to see the small coal mining concern going out of business because it simply was not relevant in the modern coal industry. I have my regrets at what is happening in the soft drink and ice-cream industry. I hope that the right hon. Gentleman can offer some sort of amelioration in the near future.

Mr. John Farr: I want to follow up what the hon. Member for Leeds, South (Mr. Merlyn Rees) has just said, especially about soft drinks. One of my constituents has written to me in his capacity as vice-president of the National Association of Soft Drinks Manufacturers and has pointed out to me that since Purchase Tax was imposed on soft drinks the number of firms going bankrupt in that industry has considerably increased.

Mr. Merlyn Rees: On a point of order, Sir John. I thought that I heard the hon. Member giving me a title in the icecream industry that I certainly do not hold.

The Temporary Chairman: That is not a point of order.

Mr. Farr: I was saying that I had received a letter from the vice-president of the National Association of Soft Drinks Manufacturers. I am sorry if my elucidation is not what it should be. The letter says that in recent years, since the Purchase Tax was put on soft drinks, quite a number of firms have been going out of business. He has written to me specifically in connection with this Clause.
I must confess that I feel that as soon as possible this tax on sweets, soft drinks and ice cream should be completely abolished but I appreciate that the moment is not opportune. I would like to read an extract from the letter show-

ing that the Clause would in no way solve this problem. It says:
I would like to bring to your notice that it would be extremely difficult to ensure that such a reduction, which would amount to only a fraction of a penny on the normal family size bottle of soft drink, could be passed on to the consumer. A reduction in purchase tax that could not be passed on to the consumer would, in my opinion, be undesirable.
He feels that the only eventual solution is complete abolition of the tax.
I join in the questions which have been addressed to the Opposition Front Bench, notably by my hon. Friend the Member for Nottingham, South (Mr. W. Clark) and my hon. Friend the Member for Ilford, South (Mr. Cooper). Exactly where would the Opposition find the £140 million involved in these two Clauses? Exactly how would they find the £300 million or £400 million which is the total cost of the concessions which they have tabled? Does not the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) remember that when the Socialists were in office the maximum rate of Purchase Tax was 100 per cent., and that since then it has been reduced to only 25 per cent? If she remembers that, it is useless for her to say that the Government have done little or nothing in that respect.

Mrs. Slater: We recognise that we are living in completely different circumstances from those which then obtained.

Mr. W. Clark: Hear, hear.

Mrs. Slater: Not because of the Tories. We could be living under much better conditions if we had had a Labour Government instead of a Tory Government for the last 12 years.

Mr. Farr: If the rates of taxation today were what they were in 1951, the country as a whole would be paying annually more than £1,000 million in taxation more than we are paying today.

Mr. V. Yates: Like his hon. Friends the Member for Nottingham, South (Mr. W. Clark) and the Member for Ilford, South (Mr. Cooper), the hon. Member for Harborough (Mr. Farr) is living in the past. The hon. Member for Nottingham, South was so much in the past that he insisted on calling you "Mr.", Sir John. He charged hon. Members on this side of the Committee with a purely electioneering approach. He must be ignorant of the


fact that we have raised these questions of Purchase Tax for years.
Hon. Members will remember that when Lord Amory was the Chancellor of the Exchequer, we constantly questioned him about the Purchase Tax on pots and pans. I said that I was prepared to challenge him to a competition on the use of the rolling pin, which is one of those domestic articles which the working classes have to purchase. I said then and I say now that there are many working people, old-age pensioners in particular, who use a bottle for a rolling pin because they cannot afford a Pyrex rolling pin.
I was surprised when the hon. Member for Orpington (Mr. Lubbock) spoke about helping the needy. I would have thought that a very good way of helping the needy was to reduce the Purchase Tax on pots and pans, especially those which old-age pensioners find it difficult to replace.
Over and over again, when we have proposed Amendments to Finance Bills, hon. Members opposite have said that we have not worked out the cost of our alternatives. One hon. Member opposite frightened me when he talked about my hon. Friend the Member for Sowerby (Mr. Houghton) sitting on that side of the Committee—

Mr. W. Clark: He frightened us.

Mr. Yates: —and possibly bringing in a Budget like this. I am sure that if my hon. Friend were on that side of the Committee, Amendments like these would not be proposed, because they would not be necessary.
5.45 p.m.
Whatever may be thought about a uniform rate of tax, I should have thought that we were reaching a stage when we could abolish the taxes on some of the ordinary articles which the poorest section of the community uses every day. I was very sad when the Government decided to impose a tax on confectionery. It is very hard on the community as a whole and especially on the children and I cannot imagine such a proposal being put forward if there had been a Labour Government. If it had been, I am sure that it would have been strongly resisted.
What disturbs me in our debates on Purchase Tax is that while the Government bring in a Budget providing a general framework, before we state the case for our Amendments we are expected to say how we would alter that general framework. We are not responsible for the Budget and in our Amendments all we do is say what we think should be done in certain respects. The speech of the hon. Member for Ilford, South was old fashioned and was merely an attempt to tell us how he proposed to fight the election. I am certain that it will carry no weight. The working people are well aware of the burdens of Purchase Tax on the everyday items which they have to buy.
I have much sympathy with the hon. Member for Kidderminster (Sir G. Nabarro) who has constantly criticised Purchase Tax anomalies. I am disturbed that we do not have a proper investigation of these anomalies. I gave an example of one of them last year, as the Chief Secretary will be aware. I said that I could not understand why food should be included in the 15 per cent. Purchase Tax on soft drinks and confectionery. It applies to chocolate biscuits. I need not go over the ground again, but I explained how if the chocolate were on top of the biscuit, the tax was imposed, whereas if the chocolate were in the middle of a sandwich, there was no tax. That is idiotic, but that is the kind of anomaly with which we have had to deal, and there are many other examples.
I cannot appeal to the heart or the head of the Chief Secretary who last year accused me of being excited and heated about this matter. The right hon. Gentleman then said:
This is a quite complicated problem which my hon. Friend the Economic Secretary has already discussed with representatives of the trade. The problem, briefly, is that there is a kind of chocolate biscuit sold in sweet shops which is very close to chocolate bars, with a different filling. There is also a type of chocolate biscuit which one buys at grocery shops and which to all intents and purposes is a biscuit. The difficulty… is to get the definition right. If we can find a definition with which the trade agrees and which we think workable… we shall be able to make some progress, but I do not dispute that the hon. Member for Ladywood has made a point."—[OFFICIAL REPORT, 28th May, 1963; Vol. 678, c. 1206–7.]


What did he do about the point that I made? That just about takes the biscuit.
Later the Economic Secretary wrote to me and said:
The simple point is that we have tried to be of assistance to the trade in general, and Customs have conducted negotiations on my authority with the trade associations to this end. Although agreement was reached, it is not apparently acceptable to Messrs. Mac-donalds…
Because one firm out of many engaged in the trade objected, it was impossible for the Government to accept a definition which would remove a burden which housewives have to bear when they purchase these items.
I raised this matter a year ago, and I was supported by other hon. Members. We gave facts and figures to show the effect of this tax on the industry, and today hon. Members have referred to factories which make soft drinks going bankrupt. The Committee must take notice of all these matters. As a back bencher I have no control over the framing of a Budget, and it is not for me to say that one must do A, B, C and D before one can do E.
I am not making an electioneering speech. I am so opposed to Purchase Tax that if I had my way I would remove it altogether. I do not agree with those who say that all taxation is bad. We cannot live without taxation, and not all taxation is bad. What is bad is the method adopted. If the methods adopted by the Government impose heavy burdens on old-age pensioners and the less forunate sections of the community, the Government ought to consider ways of removing those burdens.
I should not have thought that it was beyond the bounds of possibility to abolish, or at any rate to reduce, the burden of tax on food and drink. I hope that the Chief Secretary will make one more attempt to see whether there is any prospect of the ordinary people in this country being able to enjoy better standards of living than they do now.

Mr. Raymond Gower: The hon. Member for Birmingham, Lady-wood (Mr. V. Yates) made an important point when he said that his party was not responsible for the Budget, but I am sure that he will agree that proposals put forward for amending the Budget must be

viewed in the context of the country's current financial and economic position, and not in isolation or in the context of a Budget introduced two or three years ago.
Whatever the hon. Member for Sowerby (Mr. Houghton) may say, I think that these proposals have been put forward at a singularly inopportune time. It is not often that one finds so many economists, financial commentators and writers in agreement to the extent to which they have been this year. They agree that if there is a danger at present, it is not the danger of too little money, but rather too much, and that my right hon. Friend has perhaps not done enough to reduce the pressure.
Hon. Gentlemen opposite suggest that we should increase the pressure by about £100 million, or, as one of my hon. Friends said, by about £130 million. My hon. Friend the Member for Nottingham, South (Mr. Clark) was right when he said that if they make such proposals they should also make proposals for finding the money from other sources. If they do not, one is left to assume that they are asserting that we can let the economy run at a greater rate than it is doing now. Apparently they are prepared to take greater risks.
On many occasions hon. Members opposite have said that they are opposed to a policy of stop-go. The greatest danger lies in increasing the pressure on the economy by the amount suggested by hon. Gentlemen opposite, and I think that the hon. Member for Sowerby at least has an obligation to show why, in those circumstances, he has added his support to these proposals. He suggested that if his party were in power he would be able to find alternative sources of taxation to provide this money. That could be the answer, but he did not specify those sources.
The hon. Member suggested a tax on gambling as a source of revenue, but there is a good deal of evidence to show that the amount of money which could be recovered by a tax on gambling is far more limited than we once thought. The hon. Gentleman did not say whether he would bring in any form of indirect taxation. He did not suggest a tax on services. In fact, he made no attempt to elaborate his remarks, which he must do if he wants the Committee to accept


his contention that other sources of taxation are available.

Mr. Jay: Did not the hon. Gentleman notice that during the Budget debate my hon. Friend the Member for Sowerby (Mr. Houghton) referred to alternative sources of providing revenue? He did so then because it was more in order to do so than it is today.

Mr. Gower: The impression created by the proposals put forward by hon. Gentlemen opposite is that they are prepared to take this extra risk and let the economy run a little faster. Indeed, that suggestion has been made in many contexts. Hon. Gentlemen opposite have been pressing for vastly increased expenditure in many fields. We are, therefore, entitled to say that my right hon. Friend's decision was obviously a matter for very fine judgment. His judgment might be proved to be wrong, but I do not think that we should increase the risk of having to return to restraint and stop-go, which have been condemned on many occasions.
I do not think that at this stage we should increase the amount of money available for consumables. Instead of concentrating on making money available for products of this kind, the Government, rightly, have concentrated on making money available for the improvement of the capital resources of the country.

The Temporary Chairman (Sir John Arbuthnot): Order. I think that we ought to return to the new Clause.

Mr. Gower: That point was made earlier, but I shall not pursue the matter any further.
I hope that the hon. Member for Sowerby, the right hon. Member for Battersea, North (Mr. Jay) and the hon. Member for Cardiff, South-East (Mr. Callaghan) will advise their colleagues that, in the context of our present economic position, the Government would be unwise to make the concessions which are being asked for, and that they will not press this matter to a Division.

6.0 p.m.

Mr. A. V. Hilton: I support what my hon. Friends have said on the two new Clauses. From personal experience I have proved that Purchase Tax on the articles that we are

now discussing hits hardest the old, the sick, the unemployed and the lowest-paid workers. I have the honour of living in a cottage, among my constituents, many of whom are old, sick or unemployed, and I know what an added burden is imposed on them when they have to replace furniture that has become broken over the years, or clothing or shoes which have worn out. The 10 per cent. Purchase Tax on these essentials—they are not luxuries—hits very hard those persons to whom I have referred.
Many hon. Members opposite have said that before the Committee accepts the new Clause my party ought to say where the money will come from. I would remind them that if, four years ago, instead of handing £83 million to the surtax payers—about 2 per cent. of our population—the Government had knocked off Purchase Tax, part of this problem would not now exist.
I want to speak mainly of a constituency issue, which I have raised not merely this year, because it is election year, but ever since the tax was first imposed. I refer to the 15 per cent. tax on blackcurrant juice, or on the manufactured Ribena. I, too, am sorry that the hon. Member for Kidderminster (Sir G. Nabarro) is not here, because last year he and I joined forces. It was the first time that we have ever agreed on anything in this House. He, too, thought that this was a bad tax. Since then I have tabled a number of Questions upon this subject to the Minister of Agriculture and also to the Chancellor of the Exchequer.
The last Question that I put to the Chancellor asked how much revenue the tax had brought in. The Chancellor was unable to give me an answer. He said that the Inland Revenue lumped a certain number of taxes together, and implied that the revenue from this tax was insignificant. This is a serious problem for many people in Norfolk and other agricultural areas who grow blackcurrants. Since the imposition of this tax there has been a serious deterioration in the industry.
Another of my Questions to the Minister of Agriculture asked what acreage of blackcurrants was cultivated before the imposition of the tax, as compared to the acreage cultivated afterwards. He had to agree that the acreage had been


considerably reduced. This is not surprising, because last year, in particular, many of the smaller blackcurrant growers in Norfolk were unable to gather their crop, because the trade was not good enough. Although this is a valuable fruit crop many acres of blackcurrants were allowed to rot on the bushes.
There is a difference between the small horticulturist, or the farmer who grows a few acres, and the big farmer, to whom the loss of a few acres of blackcurrants does not matter, because he has eggs in other baskets. The small horticulturist often relies to a large extent on his blackcurrant crop. I am glad to see that the Chief Secretary is listening so intently. The imposition of this tax has hit them hard. It has had a serious consequence not only for the grower, but also for the manufacturer, who has had to increase the price to cope with the 15 per cent. Purchase Tax.
More important still is the effect of the tax on the very young and the very old—because blackcurrants have a tremendous medicinal value. People who live in rural areas swear by the value of blackcurrant juice for sore throats, colds, and that sort of thing. Owing to the increase in Purchase Tax on this product both the very old and the very young have been unable to have as much of this good medicine as they would have liked.
I hope, therefore, that the Minister will give serious consideration to this matter. Last year this was a non-party matter, raised not merely because there was an election in the offing, but because of genuine concern among hon. Members' constituents. The Clause that has been moved reduces to 7½ per cent. the Purchase Tax on goods now subject to a tax of 15 per cent. Personally, I would like to see Purchase Tax removed completely from blackcurrant juice, because it is a very valuable product for the small horticulturist, besides being of medicinal value. However, I would be prepared to meet the Government half way if they would agree to reduce the tax to 7½ per cent. I hope that the Minister will seriously consider the suggestion.

Mr. Nigel Birch: The hon. Member for Birmingham, Lady-

wood (Mr. V. Yates), as far as I could make out, challenged my right hon. Friend to single combat with a rolling pin, a very bold move for a pacifist. I was impressed by that.

Mr. V. Yates: I challenged him in the use of a rolling pin, not to a duel with a rolling pin.

Mr. Birch: The hon. Member's pacifist conscience is clear.
The hon. Member said something with which I entirely agree. He said that his party does the same thing every year. What it does do every year is to say that there is grave danger of inflation and then produce a series of vote-catching Amendments which would enormously increase the risk of inflation. I hope that my hon. Friends will forgive me if I make a suggestion which might help the Labour Party. I believe that it would have a positively electrifying effect on the country if anybody on the Opposition Front Bench, when discussing finance, were ever honest.

The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): I think that I can best be of service to the Committee if I seek to reply to one or two of the points affecting individual commodities which have been discussed in the debate and then come back to the main theme of the two new Clauses which we are discussing together I should like, first, to say that this is to my recollection the first Purchase Tax debate in which my hon. Friend the Member for Kidderminster (Sir G. Nabarro) has not taken part, and I am sure that the debate has lost a good deal in liveliness and knowledge from my hon. Friend's absence. I think that hon. Members on both sides of the Committee regret that absence and its cause.
May I take fairly quickly one or two of the individual points? In view of the serious threat which, as my right hon. Friend the Member for Flint, West (Mr. Birch) pointed out, the hon. Member for Birmingham, Ladywood (Mr. V. Yates) appears to be offering to me—although I thought that it was much more a threat to repeat frequently the tongue-twisting formula "mixed biscuits" than the rougher method which my right hon. Friend suspected—I should


like to come to the point about biscuits, because the hon. Member very properly quoted what I said in the debate last year and asked me what had happened.
It might be of help to the hon. Member and the Committee if I told him exactly what did happen. Provisional agreement was reached between the Customs and the trade association concerned, the Cake and Biscuit Alliance, as long ago as last July, and a formula for restricting the tax to the confectionery types of chocolate biscuits was arrived at. But, as I think the hon. Member indicated that he knew, this compromise was vigorously opposed by one major producer in this trade. The Cake and Biscuit Alliance subsequently had a talk with my hon. Friend the Economic Secretary and accepted that in the circumstances the proposal would have to be abandoned.
The position remains as my hon. Friend told the trade association—that the Government would be prepared to consider without commitment any fresh proposals which were put forward with unanimous support. To date, no such proposals have been put forward.

Mr. V. Yates: It was clear that the Government were not prepared to accept a proposal with which one firm did not agree. The trade association had, therefore, no alternative, had it?

Mr. Boyd-Carpenter: This is a very difficult question of definition, and we can help only if there is general good will in the trade to work a particular line of demarcation. I am again sorry that my hon. Friend the Member for Kidderminster is not here, because he is very good on the type of biscuit which attracts or repels tax. But this proposal could be worked only with the general agreement of the trade, and that agreement was not and is not forthcoming.

Mr. V. Yates: Must it be unanimous?

Mr. Boyd-Carpenter: I think that it has to be fairly unanimous if it is to be fair between traders who may mink that their interests are affected. We are prepared to consider anything generally accepted by the trade.
There has been a good deal of discussion about the effect on soft drinks,

ice cream and confectionery of the 15 per cent. rate of tax which is the subject matter of the first two Clauses. Several hon. Members raised the question of a disincentive to consume non-alcoholic drinks. I remind the Committee that in this Bill we are increasing the differential in tax between alcoholic and nonalcoholic drinks by increasing the tax on alcoholic drinks. In so far as there is any force in that argument, it is being diminished.
As to the state of the industry, I agree with one or two hon. Members that it has had certain difficulties, but it is doubtful whether they are much to do with the tax. There has been a concentration of the trade into fewer hands. There has been a move by some of the brewery interests into soft drinks, with fairly large-scale and highly competitive manufacture, and that has resulted in a number of the smaller firms closing down, though it is also a fact that some new firms have started. But there is one significant figure which I can give to the Committee, and that is that the bottling industry says that in 1963 it supplied 12 per cent. more bottles to the soft drinks industry as a whole than it supplied in the previous year.
Confectionery sales have fluctuated, but if one looks at the report of the main companies operating in this field there is certainly very little reason for gloom. Both Rowntrees and Cadbury-Fry—and this should rejoice the heart of the hon. Member for Orpington (Mr. Lubbock)—have shown substantial increases in their profits and in their dividends, and that is the general picture in the confectionery trade.
The ice cream situation is more complicated. I am bound to say that I had some sympathy with the hon. Member for Leeds, South (Mr. Merlyn Rees) when he said that ice cream did not taste as good as it did when one was young. But the Committee will appreciate that it is difficult to distinguish precisely the; effect on the trade of the tax and the effect of the two summers which have followed its imposition.
I will come to my main remarks on the new Clauses. The right hon. Member for Battersea, North (Mr. Jay) was rather anxious that they should not be taken at their face value. He started out by saying that I should refer to the


cost, but he said, "This is quite irrelevant because the Clause is simply a vehicle under our rules for a discussion of Purchase Tax generally". Nevertheless, I shall not be deterred from giving the Committee the cost, for this reason: if the new Clause is put forward as a vehicle for discussion, that is one thing, and one may well say that it is a sensible parliamentary expedient, but it would become quite another thing if the right hon. Gentleman led his hon. Friends into the Lobby for the reduction of these taxes, because however much he might seek, with Wykehamist sophistication, to explain what he meant, what he would be doing and would be understood to be doing by our fellow countrymen would be moving to reduce taxation in the shape of Purchase Tax by £112 million in a full year—£27 million in a full year on the first new Clause and £85 million on the second.
6.15 p.m.
This is a bigger decrease in revenue on a full-year basis, than the amount likely to be obtained from the increased taxes on alcohol and tobacco. I think that my hon. Friends were entitled to challenge the right hon. Gentleman, certainly if he intends to divide the Committee on the new Clause. In doing so, is he contesting my right hon. Friend's economic judgment that the Budget this year should provide about £100 million extra in taxation? His hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) last week appeared so to do. But the right hon. Gentleman accepted it. If he does, and if he suggests that nonetheless there should be a counter movement to reduce taxation by £112 million, what are his proposals for making up that deficit?

Mr. Jay: Three proposals: first, a real capital gains tax, instead of the mockery which the Government have provided, and which, if it corresponded with the present American capital gains tax, would in itself raise more revenue than the whole of the taxes which we are discussing; secondly, a reasonable rate of Profits Tax on distributed profits; and, thirdly, an end to the gross evasion of death duties which is going on.

Mr. Boyd-Carpenter: I am obliged to the right hon. Gentleman for being a little plainer than he was—and I mean

that in no personal sense. But, as he appreciates, whatever the merits of his proposals, we may ask whether he thinks that the Labour Party wealth tax could be introduced in time to affect the revenue this year. Does he think that a capital gains tax, if that be the alias under which it will be disguised, could produce new revenue during the course of the current year? The right hon. Gentleman knows that none of the examples which he has given could affect the revenue in this year.

Mr. Jay: Is the right hon. Gentleman simply saying that the Government ought to have done these things a year ago? Is not this further evidence that the Government's actions are usually both too little and too late?

Mr. Boyd-Carpenter: No. What I am saying is that these proposals are, first, in themselves nonsense, and, secondly, irrelevant nonsense, because, as the right hon. Gentleman knows, none of them, if it produces revenue, could produce it in the year in which these new Clauses would deprive us of the revenue. Therefore, the right hon. Gentleman, who has some experience of Whitehall, knows that the three examples that he gave—it is very interesting to have them; the right hon. Gentleman may well regret having given them; I hope that he will give us some more—are not an answer to my question, because they could not be in this year.
It is now plain that, if the right hon. Gentleman leads his hon. Friends into the Lobby in support of the Clause, he is doing so to reduce the amount overall taken in taxation this year and is disregarding the inflationary effects of so doing. It is just as well that we in the House of Commons and those outside should note that.
Then the right hon. Gentleman gave an extremely selective account of the history of Purchase Tax. He referred, perfectly truthfully, to its increased scope in recent years, though I thought that the hon. Member for Sowerby (Mr. Houghton) when he intervened in the speech of my hon. Friend the Member for Nottingham, South (Mr. W. Clark), seemed to have some sympathy with an increase in its scope. Indeed, the hon. Gentleman offered some imprecisely stated suggestions for its further extension.
The right hon. Gentleman was very excited about the alleged increase in the scope of Purchase Tax. He did not think to mention—indeed, this was not mentioned until my hon. Friend the Member for Harborough (Mr. Fair) did so—that over these years there has been a very substantial reduction indeed in the rates of Purchase Tax. When the right hon. Gentleman left office, the maximum rate was 100 per cent. Today, it is 25 per cent. It is perfectly true that the tax has a wider scope, but it also has a very much lower rate.
Those of us who have studied these matters, this includes the right hon. Gentleman—know full well that this tax, if it is at lower rates and is more widely dispersed, has a very much less distorting effect on industry and production than very high rates, with all the anomalies that they create between one Purchase Tax class and another. The right hon. Gentleman's somewhat partial account of the evolution of Purchase Tax failed to bring out the great improvement in the shape of the tax which has taken place over the years.
I was very surprised at the hon. Member for Southampton, Itchen (Dr. King), because he seemed to think that it was a rather bad thing that at the same rates of Purchase Tax the yield was rising this year as compared with last year. I ask the hon. Gentleman to reflect. Surely this is a good sign. It is a sign of expansion, of more money in the hands of the people to spend on the articles covered by Purchase Tax. It is also a very clear indication, from the point of view of the industries whose products are subjected to Purchase Tax, that the tax is not having an inhibiting effect on the expansion of the consumption of their products. Therefore, I join issue with the hon. Gentleman. I think that the fact that the same rate of tax produces a substantially increased yield is a good thing in itself and a good indication of what the expanding economy under this Government is doing.
The right hon. Gentleman returned to his hobby-horse of the percentage taken by direct and indirect taxation. He was shot down in the Budget debate by my hon. Friend the Financial Secretary, who showed that the proportion taken in indirect taxation today was lower than it

was in 1951 under the Labour Government. However, the right hon. Gentleman came back today and said that my hon. Friend the Financial Secretary was able to show that only by excluding the National Insurance contribution.
I will not waste the time of the Committee on this, but I think that some of us would have some doubts of the place of the National Insurance contribution in any system of taxation and, indeed, about the relevance of mentioning it without mentioning the great increase in National Insurance benefits which has accompanied it.
However, I will give the right hon. Gentleman the point—only to show him that he is still wrong. If the employee's National Insurance contribution is added—this is what the right hon. Gentleman is after, I think; the employer's contribution is obviously in a different category for the purpose of this argument; I am sure I carry the right hon. Gentleman with me on that—in 1951, adding the employee's contribution to indirect taxation, the proportion taken was 50·4 per cent. In the latest year for which we have figures—1962—it was 48·4 per cent. Therefore, even giving the right hon. Gentleman what I think is a false argument, he still remains in error.

Mr. Jay: I do not agree for one moment that the employer's contribution should be excluded. Since everyone knows that the employer's contribution is added to the price of goods, clearly that is an indirect tax.

Mr. Boyd-Carpenter: The right hon. Gentleman cannot get away with that. The whole point of his argument was that we were piling what he called regressive taxation on to those unable to afford it. From that point of view, even if there be an argument about the employer's National Insurance contribution, it is an arguable proposition, though since we have had the graduated scheme even that has lost its force. The right hon. Gentleman cannot add the employer's contribution any more than any other element in the costs of industry generally.
The right hon. Gentleman also said, in his airy way, that he did not accept that Profits Tax could not have been brought in this year in time to make up


to the loss of revenue. Incidentally, the poor old Profits Tax is being used twice over, because first the right hon. Gentleman wanted to use it instead of the increase in the duty on alcohol and tobacco. Now he wants to use it instead of a decrease in Purchase Tax. It is no good the right hon. Gentleman saying that he does not accept it, unless he is prepared to say that what he is urging is retrospective taxation. If he does not do so, the yield of an increase in Profits Tax capable ultimately in a full year of producing the £100 million or so concerned would be £4 million in the current year. Therefore, the right hon. Gentleman is again just plain wrong.
Then the right hon. Gentleman referred to exports lagging behind, when in the first quarter of this year they were at a record level. Then he said that a Labour Government, if we had such a strange anomaly again—

Dr. King: We shall.

Mr. Boyd-Carpenter: I would not be so sure about that, if I were the hon. Gentleman. The right hon. Gentleman said that a Labour Government would remove from the Purchase Tax certain articles now covered by it. That seemed to be plain contrary to what the hon. Member for Sowerby said in his intervention about increasing the scope. I was reminded of a parody of the old poem:
Two voices are there; one is of the deep;
And one is of an old half-witted sheep…
And Labour, both are thine.
We come back to the question whether this proposal is put seriously in the circumstances of this year to reduce the revenue from Purchase Tax on a full year basis by £112 million. Either that is put forward seriously to the country, with right hon. Gentlemen saying that they accept the consequences to the economy—that is not the line they have taken so far in this debate, and to his credit the hon. Member for Cardiff, South-East has not taken it—or they are saying that they attach such priority to a reduction in the Purchase Tax that they would impose some other taxation effective in this year. They have not told us of any taxation effective in this year which they would seek to impose.
We are, therefore, left with the clear indication that the attitude of right hon.

and hon. Members opposite is of such horrifying irresponsibility that I hope that people outside will note it.

6.30 p.m.

Mr. Houghton: Hon. Members opposite have said very little about the merits of these two new Clauses. Until the Chief Secretary spoke their criticism was on two main grounds: first, that the proposals we were putting to the Committee were in marked contrast to the levels of Purchase Tax which existed when Labour were in office; and, secondly, on general economic and revenue grounds.
The Chief Secretary referred to some of the detail raised by my hon. Friends in criticism of the two rates of Purchase Tax. Clearly, my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates) was not challenging the right hon. Gentleman to a duel with rolling pins, but criticising him for not yet having found an intelligent and acceptable definition of a chocolate biscuit. I said a year ago that one could not have much confidence in a Government which could not define a chocolate biscuit. To my astonishment, I found that this had been included in the Sunday Times' sayings of the year, which showed that it had some point.
The Chief Secretary has confessed that he has still not found his way out of this difficulty. It may be due to some awkwardness in the trade, or perhaps that the Government introduced a tax into this sphere without making sure beforehand that they could define what it was they were taxing. However, that difficulty still remains.
Our main criticism of the extension of Purchase Tax several years ago was that it moved into the realm of food on the one hand and, on the other, that it extended Purchase Tax to more necessaries, including clothing. Whatever comments I have made about the use of indirect taxation must not be regarded as meaning that all I have in mind is the extension of the existing field of indirect taxation. One form of indirect taxation can be substituted by another. The area of indirect taxation can move with the times. It can change according to the pattern of public expenditure and all sorts of possibilities open up when


a future Chancellor comes to consider present trends.
When I mentioned gambling it was not to suggest that all the money requisite to meet these two new Clauses could be obtained from a taxation on gambling, but gambling is not the only possible addition to the realms of indirect taxation. There are others.

Mr. W. Clark: What are they?

Mr. Houghton: I will not stop to define them. [Laughter.] Obviously, there are others and anyone can think of them. What I am saying is that as the pattern of expenditure changes undoubtedly the pattern of indirect taxation will change with it.
My hon. Friends are bound to agree that in present circumstances no Chancellor could manage without a substantial amount of indirect taxation. That goes without saying. What the proportion in relation to direct taxation should be is a matter for consideration. At the same time, none can feel satisfied about the present proportion of indirect taxation to the total revenue so long as there are loopholes, leakages, shortcomings and inadequacies in direct taxation. Let us get direct taxation right first and then is the time to consider what part indirect taxation shall play.
If we are to revert in our discussion to conditions of money years ago, let me remind the hon. Member for Nottingham, South (Mr. W. Clark) that at the time the Labour Government were leaving office they had to face the painful and tragic necessity of accommodating within public expenditure an enormous additional burden for rearmament directly resulting from the disturbing development of the cold war. That had to be brought within the scope of expenditure at a time when great social changes and additions in social security were being made and when we were engaged in a long and painful struggle for economic recovery.
There is simply no comparison between the circumstances in which we had to levy Purchase Tax then and now. We had to accommodate it soon after the end of the war, when we thought we had dispelled fear from the world and the risk of a further war. We had to

accommodate no less a defence programme—

Mr. W. Clark: rose—

Mr. Houghton: I wish that the hon. Member would hold his horses for a moment. He may be Chairman of the Conservative Party Finance Group, but he has no need to behave like a jack-in-the-box.
I was saying that we had to bring within the scope of budgetary provision a defence programme which was then costing about 11 per cent. of the gross national product. It is costing not very much less now. It was heavy to bear at that time, particularly when so much was needed for the economic recovery of the country and our social progress.

Mr. W. Clark: rose—

Mr. Houghton: I am dealing with a point which the hon. Member for Nottingham, South himself raised. If he will listen to me I will later gladly give way.
I was pointing out that Purchase Tax was being levied then as a curb on consumption. It was an economic and not a revenue weapon. It was necessary to impose purchase tax to provide the essential discouragements on consumer expenditure—when there were too few goods being chased by too much money.

Mr. W. Clark: A new angle appears to be coming into the picture now. The hon. Gentleman is saying that when the Labour Party went out of office they had to increase Purchase Tax to 100 per cent. because of the rearmament programme due to the Korean War. Accepting that, the six years of Socialist planning, resulting in 100 per cent. Purchase Tax, still left this country in 1951 practically broke.

Hon. Members: Rubbish.

Mr. Houghton: The hon. Member's intervention gave the Committee not only a distorted but an offensive description of the six years of Labour Government. Cannot hon. Members opposite see the conditions under which the Labour Government were labouring at a time of economic recovery? There is surely no possible value now in comparing conditions which exist today with conditions of Purchase Tax levied at high rates 15 years ago.

Mr. Bruce Millan: When speaking of the levying of a purchase tax of 100 per cent. in 1951, the matter should be put in its right perspective by reminding the Committee that as recently as 1958—after seven years of Conservative government—the top rate of Purchase Tax was still 90 per cent.

Mr. Houghton: I want now to deal with the second main ground on which these two new Clauses have been opposed. The Chief Secretary had a good deal to say on this theme. He said that these Clauses are inconsistent with the general economic and revenue requirements of this year. We have been challenged by various hon. Members opposite to say where, if we reduce Purchase Tax as is here proposed, we should go for additional revenue. The hon. Member for Ilford, South (Mr. Cooper) said that the new Clauses on the Notice Paper, if added together, would probably cost the Exchequer £300 million or £400 million. If we added together all the new Clauses standing in the names of right hon. and hon. Members opposite they, too, come to a formidable total.
When Labour was in office, and the right hon. Gentleman the Member for Woodford (Sir W. Churchill) was putting forward numerous proposals during our Budget discussions which added to a considerable amount of revenue, and was challenged to say where he would go for the money, and whether he realised what the total of those proposals would be, his reply was that these were not aggregations but alternatives. Another reply he used to give was, "When we are in office, and have all the available information before us, we will decide how these things can be done"—

Mr. W. Clark: And we did.

Mr. Houghton: It would be possible to give exactly the same reply now to hon. Members opposite, but who has said that it would be necessary to raise additional revenue to meet the revenue reduction resulting from acceptance of these new Clauses? Nobody has mentioned expenditure. Not a single hon. Member has even hinted at the suggestion that expenditure could be reduced by £100 million this year to accommodate the reduction in the revenue—

Mr. Angus Maude: Where?

Mr. Houghton: It is not the slightest bit of good hon. Members opposite challenging the Chairman of the Public Accounts Committee to say where he would find the money. Any hon. Member can go to the Vote Office in five minutes, get hold of the Reports of the Public Accounts Committee and find where money could have been saved—and where it could be saved now.
If the right hon. Gentleman will stop the tax drain on company taxation, that will give him one-fifth of what he requires this year, and there are other directions in which expenditure could undoubtedly be curbed. If we look at the grand total of fruitless and futile defence expenditure, hon. Members opposite should surely feel ashamed that it is necessary to keep taxation at its present level at all.
The fact is that our Finance Bill debates are the occasion for ventilating grievances, for drawing attention to anomalies and injustices in our taxation system, and for putting forward possible remedies for what we feel to be wrong. The Committee stage covers not only the Clauses of the Bill, but the new Clauses as well. We must have some scope for debate on the Bill. We must have the right, as representatives of the people, to draw attention to where the shoe pinches, to where we feel that taxation is unfair or unjust, and the respects in which it should be remedied.
If we go into the Division Lobby, as I hope we shall, on these two new Clauses, it does not necessarily mean that we are trying to upset the shape of the Budget—although it is not the Opposition's job to reshape the Budget; that is the job of the Government. If the Committee expresses itself in any particular direction as dissenting from this or that item of taxation in general, what it will be doing is registering an opinion on a matter of great public interest.
6.45 p.m.
That is not electioneering—[HON. MEMBERS: "Oh."] Goodness me, there is no need for us to go electioneering now. The new hon. Member for Faversham (Mr. Boston) brought the message into this Chamber only a few hours ago. On the very day that the Chancellor of the Exchequer was repeating and reaffirming his view that Labour's policies would be disastrous,


Faversham was recording its opinion that a Labour Government should succeed the present one. The fact is that hon. Members opposite are doing the electioneering, and very little success is attending their efforts.
The Labour Party has no need to go electioneering in a cynical sense when we are putting to the people constructive alternatives to the policies of this Government—[HON. MEMBERS: "Oh."] In a few moments, when we come to further new Clauses, I will quote to the Committee a sample from the large number of letters I have received in the last few days saying that the one thing the writers look to a Labour Government to do is to stop soaking the poor. Nothing that has captivated, the imagination of the many people who feel oppressed under the present Government more than that phrase, "Stop soaking the poor". These new Clauses are one step in that direction.
The right hon. Gentleman will not be able to chide us with sheer irresponsibility in moving new Clauses of this kind, because if he and his hon. Friends

are to put up any show at all in opposition, when they come to this side of the Chamber, they will want to exploit their political advantages, they will want to express the grievances as they see them of the people whom they represent, and nothing should inhibit them from doing so.

As for the right hon. Gentleman the Member for Flint, West (Mr. Birch), if he is getting rather tired of the tedious repetition of the same new Clauses coming forward year by year, and of hearing the same speeches from the Chief Secretary year by year, I can only say that he will not undergo that experience again, for the situation will be entirely different next year. He will be making the speeches himself, instead of listening to them. I hope that my right hon. and hon. Friends will support us in the Division Lobby on both these new Clauses.

Question put. That the Clause be read a Second lime:—

The Committee divided: Ayes 200, Noes 254.

Division No. 100.]
AYES
[6.48 p.m


Abse, Leo
Davies, Ifor (Gower)
Hilton, A. V.


Ainsley, William
Deer, George
Holman, Percy


Albu, Austen
Delargy, Hugh
Houghton, Douglas


Allaun, Frank (Salford, E.)
Dempsey, James
Howell, Charles A. (Perry Barr)


Allen, Scholefield (Crewe)
Diamond, John
Howie, W.


Awbery, Stan (Bristol, Central)
Dodds, Norman
Hoy, James H.


Bacon, Miss Alice
Doig, Peter
Hughes, Cledwyn (Anglesey)


Barnett, Guy
Donnelly, Desmond
Hughes, Emrys (S. Ayshire)


Baxter, William (Stirlingshire, W.)
Driberg, Tom
Hughes, Hector (Aberdeen, N.)


Beaney, Alan
Duffy, A. E. P. (Colne Valley)
Hunter, A. E.


Bence, Cyril
Ede, Rt. Hon. C.
Hynd, H. (Accrington)


Benn, Anthony Wedgwood
Edwards, Rt. Hon. Ness (Caerphilly)
Hynd, John (Attercliffe)


Bennett, J. (Glasgow, Bridgeton)
Edwards, Robert (Bilston)
Irvine, A. J. (Edge Hill)


Benson, Sir George
Edwards, Walter (Stepney)
Janner, Sir Barnett


Blackburn, F.
Evans, Albert
Jay, Rt. Hon. Douglas


Blyton, William
Fernyhough, E.
Jenkins, Roy (Stechford)


Boston, T.
Fitch, Alan
Jones, Rt. Hn. A. Creech (Wakefi


Bottomley, Rt. Hon. A. G.
Fletcher, Eric
Jones, Dan (Burnley)


Bowden, Rt. Hn. H. W.(Leics, S. W.)
Foley, Maurice
Jones, Elwyn (West Ham, S.)


Boyden, James
Foot, Dingle (Ipswich)
Jones, J. Idwal (Wrexham)


Bradley, Tom
Foot, Michael (Ebbw Vale)
Jones, T. W. (Merioneth)


Bray, Dr. Jeremy
Forman, J. C.
Kelley, Richard


Brockway, A. Fenner
Fraser, Thomas (Hamilton)
Kenyon, Clifford


Brown, Rt. Hon. George (Belper)
Galpern, Sir Myer
Key, Rt. Hon. C. W.


Butler, Herbert (Hackney, C.)
George, Lady MeganLIoyd (Crmrthri)
King, Dr. Horace


Butler, Mrs. Joyce (Wood Green)
Ginsburg, David
Lawson, George


Callagnan, James
Gourlay, Harry
Lee, Frederick (Newton)


Carmichael, Neil
Grey, Charles
Lee, Miss Jennie (Cannock)


Chapman, Donald
Griffiths, David (Rother Valley)
Lipton, Marcus


Collick, Percy
Griffiths, Rt. Hon. James (Lianelly)
Loughlin, Charles


Corbet, Mrs. Freda
Gunter, Ray
Mabon, Dr. J. Dickson


Craddock, George (Bradford, s.)
Hale, Leslie (Oldham, W.)
McBride, N.


Cronin, John
Hamilton, William (West Fife)
MacColl, James


Crosland, Anthony
Hannan, William
MacDermot, Niall


Crossman, R. H. S.
Harper, Joseph
Mclnnes, James


Cullen, Mrs. Alice
Hart, Mrs. Judith
McKay, John (Wallsend)


Dalyell, Tam
Hayman, F. H.
MacKenzie, J. G.


Darling, George
Henderson, Rt. Hn. Arthur (RwlyRegis)
Maekle, John (Enfield, East)


Davies, G. Elfed (Rhondda, E.)
Herbison, Miss Margaret
McLeavy, Frank


Davies, Harold (Leek)
Hill, J. (Midlothian)
MacPherson, Malcolm




Mallalieu, E. L. (Brigg)
Pearson, Arthur (Pontypridd)
Stones, William


Mallalieu, J. P. W. (Huddersfield, E.)
Pentland, Norman
Swain, Thomas


Manuel, Archie
Prentice, R. E.
Swingler, Stephen


Mapp, Charles
Price, J. T. (Westhoughton)
Symonds, J. B.


Marsh, Richard
Probert, Arthur
Taverne, D.


Mason, Roy
Pursey, Cmdr. Harry
Thomas, lorwerth (Rhondda, W.)


Mellish, R. J.
Randall, Harry
Thomson, G. M. (Dundee, E.)


Mendelson, J. J.
Rankin, John
Thornton, Ernest


Millan, Bruce
Rees, Merlyn (Leeds, S.)
Tomney, Frank


Milne, Edward
Rhodes, H.
Wainwright, Edwin


Mitchison, G. R.
Roberts, Goronwy (Caernarvon)
Watkins, Tudor


Monslow, Walter
Robertson, John (Paisley)
Weitzman, David


Moody, A. S.
Robinson, Kenneth (St. Paneras, N.)
White, Mrs. Eirene


Morris, John (Aberavon)
Rogers, G. H. R. (Kensington, N.)
Whitlock, William


Moyle, Arthur
Ross, William
Wilkins, W. A.


Mulley, Frederick
Shinwell, Rt. Hon. E.
Willey, Frederick


Neal, Harold
Short, Edward
Williams, W. T. (Warrington)


Noel-Baker, Francis (Swindon)
8ilkin, John
Willis, E. G. (Edinburgh, E.)


Noel-Baker, Rt. Hn. Philip (Derby, S.)
Skeffington, Arthur
Wilson, Rt. Hon. Harold (Huyton)


Oliver, G. H.
Slater, Mrs. Harriet (Stoke, N.)
Winterbottom, R. E.


O'Malley, B. K.
Slater, Joseph (Sedgefield)
Woof, Robert


Oram, A. E.
Small, William
Wyatt, Woodrow


Oswald, Thomas
Smith, Ellis (Stoke, S.)
Yates, Victor (Ladywood)


Owen, Will
Snow, Julian
Zilliacus, K.


Padley, W. E.
Sorensen, R. W.



Pannell, Charles (Leeds, W.)
Spriggs, Leslie
TELLERS FOR THE AYES:


Pargiter, G. A.
Steele, Thomas
Mr. Redhead and Dr. Broughton.


Paton, John
Stewart, Michael (Fulham)





NOES


Agnew, Sir Peter
Curran, Charles
Holt, Arthur


Allason, James
Currie, G. B. H.
Hooson, H. E.


Amery, Rt. Hon. Julian
Dalkeith, Earl of
Hopkins, Alan


Anderson, D. C.
Dance, James
Hornby, R. P.


Atkins, Humphrey
d'Avigdor-Goldsmid, Sir Henry
Hornsby-Smith, Rt. Hon. Dame P.


Awdry, Daniel (Chippenham)
Deedes, Rt. Hon. W. F.
Howard, Hon. G. R. (St. Ives)


Barber, Rt. Hon. Anthony
Digby, Simon Wingfield
Howard, John (Southampton, Test)


Barlow, Sir John
Donaldson, Cmdr. C. E. M.
Hughes Hallett, Vice-Admiral John


Beamish, Col. Sir Tufton
Doughty, Charles
Hughes-Young, Michael


Bell, Ronald
Duncan, Sir James
Hulbert, Sir Norman


Bennett, F. M. (Torquay)
Eden, Sir John
Hurd, Sir Anthony


Bennett, Dr. Reginald (Gos &amp; Fhm)
Elliot, Capt. Walter (Carshalton)
Hutchison, Michael Clark


Berkeley, Humphry
Elliott, R. W.(Newc'tle-upon-Tyne, N.)
Iremonger, T. L.


Bidgood, John C.
Emmet, Hon. Mrs. Evelyn
Irvine, By rant Godman (Rye)


Biffen, John
Errington, Sir Eric
James, David


Biggs-Davison, John
Erroll, Rt. Hon. F. J.
Jennings, J. C.


Bingham, R. M.
Farey-Jones, F. W.
Johnson, Dr. Donald (Carlisle)


Birch, Rt. Hon. Nigel
Fell, Anthony
Johnson, Eric (Blackley)


Bishop, Sir Patrick
Finlay, Graeme
Jones, Rt. Hon. Aubrey (Hall Green)


Black, Sir Cyril
Fletcher-Cooke, Charles
Joseph, Rt. Hon. Sir Keith


Bossom, Hon. Clive
Freeth, Denzil
Kaberry, Sir Donald


Bourne-Arton, A.
Galbraith, Hon. T. G. D.
Kerby, Capt. Henry


Bowen, Roderic (Cardigan)
Gammans, Lady
Kerr, Sir Hamilton


Box, Donald
Gardner, Edward
Kershaw, Anthony


Boyd-Carpenter, Rt. Hon. John
Gibson-Watt, David
Kimball, Marcus


Boyle, Rt. Hon. Sir Edward
Giles, Rear-Admiral Morgan
Kirk, Peter


Braine, Bernard
Gilmour, Ian (Norfolk, Central)
Kitson, Timothy


Brewis, John
Glover, Sir Douglas
Langford-Holt, Sir John


Bromley-Davenport, Lt.-Col. SirWalter
Glyn, Dr. Alan (Clapham)
Leavey, J. A.


Brown, Alan (Tottenham)
Goodhew, Victor
Legge-Bourke, Sir Harry


Buck, Antony
Gower, Raymond
Lewis, Kenneth (Rutland)


Bullard, Denys
Grant-Ferris, R.
Lilley, F. J. P.


Bullus, Wing Commander Eric
Green, Alan
Linstead, Sir Hugh


Campbell, Cordon
Gresham Cooke, R-
Litchfield, Capt. John


Carr, Compton (Barons Court)
Griffiths, Eldon (Bury St. Edmunds)
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfleld)


Carr, Rt. Hon. Robert (Mitcham)
Grimond, Rt. Hon. J.
Lloyd, Rt. Hon. Selwyn (Wirral)


Cary, Sir Robert
Grosvenor, Lord Robert
Longden, Gilbert


Channon, H. P. G.
Gurden, Harold
Loveys, Walter H.


Chichester-Clark, R.
Hamilton, Michael (Wellingborough)
Lubbock, Eric


Clark, Henry (Antrim, N.)
Harris, Reader (Heston)
Lucas, Sir Jocelyn


Clark, William (Nottingham, s.)
Harrison, Brian (Maldon)
Lucas-Tooth, Sir John


Clarke, Brig. Terence (Portsmth, W.)
Harrison, Col. Sir Harwood (Eye)
McAdden, Sir Stephen


Cleaver, Leonard
Harvey, John (Walthamstow, E.)
MacArthur, Ian


Cole, Norman
Henderson, John (Cathcart)
McLaren, Martin


Cooke, Robert
Hendry, Forbes
Maclay, Rt. Hon. John


Cooper, A. E.
Hiley, Joseph
Maclean, SirFitzroy (Bute&amp;N. Ayrs)


Cooper-Key, Sir Neill
Hill, Mrs. Eveline (Wythenshawe)
Macleod, Rt. Hn. lain (Enfield, W.)


Corfield, F. V.
Hill, J. E. B. (S. Norfolk)
McMaster, Stanley R,


Costain, A. P.
Hobson, Rt. Hon. Sir John
Macmillan, Maurice (Halifax)


Coulson, Michael
Hocking, Philip N.
Maddan, Martin


Craddock, Sir Beresford (Spelthorne)
Hogg, Rt. Hon. Quintin
Maginnis, John E,


Critchley, Julian
Holland, Philip
Maitland, Sir John


Cunningham, Sir Knox
Hollingworth, John
Markham, Major Sir Frank







Marlowe, Anthony
Prior-Palmer, Brig. Sir Otho
Taylor, Frank (M'ch'st'r, Moss Side)


Marshall, Sir Douglas
Proudfoot, Wilfred
Taylor, Sir William (Bradford, N.)


Marten, Neil
Pym, Francis
Teeling, Sir William


Matthews, Cordon (Mariden)
Quennell, Miss J. M.
Temple, John M.


Maude, Angus (Stratford-on-Avon)
Ramsden, Rt. Hon. James
Thomas, Sir Leslie (Canterbury)


Maudling, Rt. Hon. Reginald
Rawlinson, Rt. Hon. Sir Peter
Touche, Rt. Hon. Sir Gordon


Mawby, Ray
Redmayne, Rt. Hon. Martin
Turner, Colin


Maxwell-Hyslop, R. J.
Rees, Hugh (Swansea, W.)
Turton, Rt. Hon. R. H.


Maydon, Lt. Cmdr, S. L. C.
Rees-Davies, W. R. (Isle of Thanet)
Tweedsmuir, Lady


Mills, Stratton
Ridsdale, Julian
van Straubenzee, W. R.


Miscampbell, Norman
Rippon, Rt. Hon. Geoffrey
Vane, W. M. F.


Montgomery, Fergus
Roberts, Sir Peter (Heeley)
Vaughan-Morgan, Rt. Hon. Sir John


More, Jasper (Ludlow)
Robson Brown, Sir William
vickers, Miss Joan


Morrison, Charles (Devizes)
Roots, William
Walder, David


Morrison, John (Salisbury)
Ropner, Col. Sir Leonard
Walker, Peter


Neave, Airey
Royle, Anthony (Richmond, Surrey)
Ward, Dame Irene


Nicholson, Sir Godfrey
Scott-Hopkins, James
Webster, David


Noble, Rt. Hon. Michael
Shaw, M.
Wells, John (Maidstone)


Nugent, Rt. Hon. Sir Richard
Skeet, T. H. H.
Whitelaw, William


Oakshott, Sir Hendrie
Smith, Dudley (Br'ntf'd &amp;;Chiswick)
Williams, Dudley (Exeter)


Orr, Capt. L. P. S.
Smyth, Rt. Hon. Brig. Sir John
Williams, Paul (Sunderland, S.)


Osborn, John (Hallam)
Spearman, Sir Alexander
Wilson, Geoffrey (Truro)


Osborne, Sir Cyril (Louth)
Stainton, Keith
Wise, A. R.


Page, Graham (Crosby)
Stanley, Hon. Richard
Wolrige-Gordon, Patrick


Page, John (Harrow, West)
Stevens, Geoffrey
Wood, Rt. Hon. Richard


Partridge, E.
Steward, Harold (Stockport, S.)
Woodhouse, C. M.


Pearson, Frank (Clitheroe)
Stoddart-Scott, Col. Sir Malcolm
Woodnutt, Mark


Percival, Ian
Storey, Sir Samuel
Woollam, John


Pickthorn, Sir Kenneth
Studholme, Sir Henry
Yates, William (The Wrekin)


Pitman, Sir James
Summers, Sir Spencer



Pitt, Dame Edith
Tapsell, Peter
TELLERS FOR THE NOES:


Pounder, Rafton
Taylor, Sir Charles (Eastbourne)
Mr. Batsford and Mr. Ian Fraser.


Powell, Rt. Hon. J. Enoch
Taylor, Edwin (Bolton, E.)

New Clause.—(PURCHASE TAX: 10 PER CENT. RATE REDUCED TO 5 PER CENT.)

Subject to any order of the Treasury made after the passing of this Act under section 39 of the Purchase Tax Act 1963, all goods hitherto chargeable to purchase tax at the rate of 10 per cent. shall be chargeable at the rate of 5 per cent. and no more; and accordingly Part I of Schedule I to that Act shall be

amended by substituting for any reference to a rate of 10 per cent. a reference to a rate of 5 per cent.—[Mr. Houghton.]

Brought up, and read the First time.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 200, Noes 252.

Division No. 101.]
AYES
[6.59 p.m.


Abse, Leo
Crossman, R. H. 8.
Griffiths, Rt. Hon. James (Lianelly)


Ainsley, William
Cullen, Mrs. Alice
Gunter, Ray


Albu, Austen
Dalyell, Tam
Hale, Leslie (Oldham, W.)


Allaun, Frank (Salford, E.)
Darling, George
Hamilton, William (West Fife)


Allen, Scholefleld (Crewe)
Davles, G. Elfed (Rhondda, E.)
Hannan, William


Awbery, Stan (Bristol, Central)
Davies, Harold (Leek)
Harper, Joseph


Bacon, Miss Alice
Davies, Ifor (Gower)
Hart, Mrs. Judith


Barnett, Guy
Deer, George
Hayman, F. H.


Baxter, William (Stirlingshire, W.)
Delargy, Hugh
Henderson, Rt. Hn. Arthur (Rwly Regis)


Beaney, Alan
Dempsey, James
Herbison, Miss Margaret


Bence, Cyril
Diamond, John
Hill, J. (Midlothian)


Bennett, J. (Glasgow, Bridgeton)
Dodds, Norman
Hilton, A. V,


Benson, Sir George
Dois, Peter
Holman, Percy


Blackburn, F.
Donnelly, Desmond
Houghton, Douglas


Blyton, William
Duffy, A. E. P. (Colne Valley)
Howell, Charles A. (Perry Barr)


Bottomley, Rt. Hon. A. G.
Ede, Rt. Hon. c.
Howie, W.


Bowden, Rt. Hn. H. W.(Leics, S. W.)
Edwards, Rt. Hon. Ness (Caerphilly)
Hoy, James H.


Boyden, James
Edwards, Robert (Bilston)
Hughes, Cledwyn (Anglesey)


Braddock, Mrs. E. M.
Edwards, Walter (Stepney)
Hughes, Emrys (S. Ayrshire)


Bradley, Tom
Evans, Albert
Hughes, Hector (Aberdeen, N.)


Bray, Dr. Jeremy
Femyhough, E.
Hunter, A. E.


Brockway, A. Fenner
Fitch, Alan
Hynd, H. (Acorington)


Brown, Rt. Hon. George (Belper)
Fletcher, Eric
Hynd, John (Atteroliffe)


Butler, Herbert (Hackney, C.)
Foley, Maurice
Irvine, A. J. (Edge Hill)


Butler, Mrs. Joyce (Wood Green)
Foot, Dingle (Ipswich)
Janner, Sir Barnett


Boston, T.
Foot, Michael (Ebbw vale)
Jay, Rt. Hon. Douglas


Callaghan, James
Forman, J. c.
Jenkins, Roy (Stechford)


Carmichael, Neil
Fraser, Thomas (Hamilton)
Jones, Rt. Hn. A. Creech (Wakefield)


Chapman, Donald
Galpern, Sir Myer
Jones, Dan (Burnley)


Collick, Percy
George, Lady Megan Lloyd (Crmrthn)
Jones, Elwyn (West Ham, 8.)


Corbet, Mrs. Freda
Ginsburg, David
Jones, J. Idwal (Wrexham)


Craddock, George (Bradford, s.)
Gourlay, Harry
Jones, T. W. (Merioneth)


Cronin, John
Grey, Charles
Kelley, Richard


Crosland, Anthony
Griffiths, David (Rother Valley)
Kenyon, Clifford




Key, Rt. Hon. C. W.
Noel-Baker, Francis (Swindon)
smith, EIHS (Stoke, S.)


King, Dr. Horace
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Snow, Julian


Lawson, George
Oliver, G. H.
8orensen, R. W.


Lee, Frederick (Newton)
O'Malley, B. K.
spriggs, Leslie


Lee, Miss Jennie (Cannock)
Oram, A. E.
Steele, Thomas


Lipton, Marcus
Oswald, Thomas
Stewart, Michael (Futham)


Loughlin, Charles
Owen, Will
Stones, William


Mabon, Dr. J. Dlokson
Padley, w. c.
Swain, Thomas


McBride, N.
Pannen, Charles (Leeds, w.)
Swingler, Stephen


MacColl, James
Pargiter, G. A.
Symonds, J. B.


MacDermot, Niall
Paton, John
Taverne, D.


McInnes, James
Pearson, Arthur (Pontypridd)
Thomas, Iorwerth (Rhondda, W.)


McKay, John (Wallsend)
Pentland, Norman
Thomson, G. M. (Dundee, E.)


MacKenzie, J. G.
Prentice, R. E.
Thornton, Ernest


Mackie, John (Enfield, East)
Price, J. T. (Westhoughton)
Tomney, Frank


McLeavy, Frank
Probert, Arthur
Wainwright, Edwin


MacPherson, Malcolm
Pursey, Cmdr. Harry
Watkins, Tudor


Mallalieu, E. L. (Brigg)
Randall, Harry
Weitzman, David


Mallalieu, J. P. W. (Huddersfield, E.)
Rankin, John
White, Mrs. Eirene


Manuel, Archie
Rees, Meriyn (Leeds, 8.)
Whitlook, William


Mapp, Charles
Rhode", H.
Wilkins, W. A.


March, Richard
Roberts, Goronwy (Caernarvon)
Willey, Frederick


Mason, Roy
Robertson, John (Paisley)
Williams, W. T. (Warrington)


Mellish, R. J.
Robinson, Kenneth (St. Pancras, N.)
Willis, E. G. (Edinburgh, E.)


Mendelson, J. J.
Rogers, G. H. R. (Kensington, N.)
Wilson, Rt. Hon. Harold (Huyton)


Millan, Bruce
Rose, William
Winterbottom, R. E.


Milne, Edward
Shinwell, Rt. Hon. E.
Woof, Robert


Mitchison, G. R.
Short, Edward
Wyatt, Woodrow


Monslow, Walter
Silkin, John
Yates, Victor (Ladywood)


Moody, A. S.
Silverman, Julius (Aston)
ZiHiacus, K.


Morris, John (Aberavon)
Skeffington, Arthur



Moyle, Arthur
Slater, Mrs. Harriet (Stoke, N.)
TELLERS FOR THE AYES:


Mulley, Frederick
Slater, Joseph (Sedgefield)
Mr. Redhead and Dr. Broughton


Neas, Harold
Small, WIlliam





NOES


Agnew, Sir Peter
Corfield, F. V.
Harrison, Brian (Maidon)


Allason, James
Costain, A. P.
Harrison, Col. Sir Harwood (Eye)


Amery, Rt. Hon. Julian
Coulson, Michael
Harvey, John (Walthamctow, E.)


Anderson, D. C.
Craddock, Sir Beresford (Spelthorne)
Henderson, John (Cathcart)


Atkins, Humphrey
Critchley, Julian
Hendry, Forbes


Awdry, Daniel (Chippenham)
Cunningham, Sir Knox
Hiley, Joseph


Barlow, Sir John
Curran, Charles
Hill, Mrs. Eveline (Wythemhawe)


Batsford, Brian
Currie, G. B. H.
Hill, J. E. B. (S. Norfolk)


Beamish, Col. Sir Tufton
Dalkeith, Earl of
Hobson, Rt. Hon. Sir John


Bell, Ronald
Dance, James
Hooking, Philip N.


Bennett, F. M. (Torquay)
d'Avigdor-Goldsmid, Sir Henry
Hogg, Rt. Hon. Quintin


Bennett, Dr. Reginald (Got &amp; Fhm)
Deedes, Rt. Hon. W. F.
Holland, Philip


Berkeley, Humphry
Digby, Simon Wingfietd
Hollingworth, John


Bidgood, John C.
Donaldson, Cmdr. C. E. M.
Holt, Arthur


Biffen, John
Doughty, Charles
Hooson, H. E.


Biggs-Davison, John
Duncan, Sir James
Hopkins, Alan


Bingham, R. M.
Eden, Sir John
Hornby, R. P.


Birch, Rt. Hon. Nigel
Elliot, Capt. Walter (Carshalton)
Homsby-Smltn, Rt. Hon. Dame P.


Bishop, Sir Patrick
Elliott, R. W.(Newc'tle-upon-Tym, N.)
Howard, Hon. G. R. (St. Ives)


Black, Sir Cyril
Emmet, Hon. Mrs. Evelyn
Howard, John (Southampton, Test)


Bossom, Hon. Clive
Errington, Sir Eric
Hughes Hallett, Vice-Admiral John


Bourne-Arton, A.
Erroll, Rt. Hon. F. J
Hughes-Young, Michael


Bowen, Roderic (Cardigan)
Farey-Jones, F. W
Hutbert, Sir Norman



Fen, Anthony
Hurd, Sir Anthony


Box, Donald
Finlay, Graeme
Hutchison, Miohael Clark


Boyd-Carpenter, Rt. Hon. John
Fletcher-Cooke, Charles
Iremonger, T. L.


Boyle, Rt. Hon. Sir Edward
Fraser, Ian (Plymouth, Sutton)
Irvine, Bryant Godman (Rye)


Braine, Bernard
Freeth, Denzll
James, David


Brewis, John
Galbraith, Hon. T. G. D.
Jennings, J. C.


Bromley-Davenport. Lt.-Col. Sir Walter
Gammans, Lady
Johnson, Dr. Donald (Carlisle)


Brown, Alan (Tottenham)
Gardner, Edward
Jones, Rt. Hn. Aubrey (Hall Green)


Buck, Antony
Gibson-Watt, David
Joseph, Rt. Hon. Sir Keith


Bullard, Denys
Giles, Rear-Admiral Morgan
Kaberry, Sir Donald


Bullus, Wing Commander Eric
Cilmour, Ian (Norfolk, Central)
Kerby, Capt. Henry


Campbell, Gordon
Glover, Sir Douglas
Kerr, Sir Hamilton


Carr, Compton (Barons Court)
Glyn, Dr. Alan (Clapham)
Kershaw, Anthony


Carr, Rt. Hon. Robert (Mitcham)
Goodhart, Philip
Kimball, Marcus


Cary, Sir Robert
Goodhew, Victor
Kirk, Peter


Channon, H. P. G.
Gower, Raymond
Kitson, Timothy


Chichester-Clark, R.
Grant-Ferris, R.
Langford-H oit, Sir John


Clark, Henry (Antrim, N.)
Green, Alan
Leavey, J. A.


Clark, William (Nottingham, S-)
Gresham Cooke, R.
Legge-Bourke, Sir Harry


Clarke, Brig. Terence (Portsmth, W.)
Griffiths, Eldon (Bury St. Edmunds)
Lewis, Kenneth (Rutland)


Cleaver, Leonard
Grimond, Rt. Hon. J.
Lilley, F. J. P.


Cole, Norman
Grosvenor, Lord Robert
Linstead, Sir Hugh


Cooke, Robert
Gurden, Harold
Litchfield, Capt. John


Cooper, A. E.
Hamilton, Michael (Wellingborough)
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)


Cooper-Key, Sir Neill
Harris, Reader (Heston)
Lloyd, Rt. Hon. Selwyn (Wirral)







Longden, Gilbert
Osborne, Sir Cyril (Louth)
Storey, Sir Samuel


Loveys, Walter H.
Page, John (Harrow, West)
Studholme, Sir Henry


Lubbock, Erie
Page, Graham (Crosby)
Summers, Sir Spencer


Lucas, Sir Jocelyn
Partridge, E.
Tapsell, Peter


Lucas-Tooth, Sir Hugh
Pearson, Frank (Clitheroe)
Taylor, Sir Charles (Eastbourne)


McAdden, Sir Stephen
Percivat, Ian
Taylor, Edwin (Bolton, E.)


Maclay, Rt. Hon. John
Pickthom, Sir Kenneth
Taylor, Frank (M'ch'st'r, Moss Side)


Maclean, SirFitzroy (Bute&amp;N. Ay rs)
Pitman, Sir James
Taylor, Sir William (Bradford, N.)


Macleod, Rt. Hn. lain (Enfield, W.)
Pitt, Dame Edith
Teeling, Sir William


McMaster, Stanley R.
Pounder, Rafton
Temple, John M.


Macmillan, Maurice (Halifax)
Powell, Rt. Hon. J. Enoch
Thomas, Sir Leslie (Canterbury)


Maddan, Martin
Proudfoot, Wilfred
Touohe, Rt. Hon. Sir Cordon


Maginnis, John E.
Pym, Francis
Turner, Colin


Maitland, Sir John
Quennell, Miss J. M.
Turton, Rt. Hon. R. H.


Markham, Major Sir Frank
Ramsden, Rt. Hon. James
Tweedsmuir, Lady


Marlowe, Anthony
Rawlinson, Rt. Hon. Sir Peter
van Straubenzee, W, R.


Marshall, Sir Douglas
Redmayne, Rt. Hon. Martin
Vane, W. M. F.


Marten, Neil
Roes, Hugh (Swansea, w.)
Vaughan-Morgan, Rt. Hon. Sir John


Matthews, Gordon (Meriden)
Rees-Davies, W. R. (Isle of Thanet)
Vickers, Miss Joan


Maude, Angus (Stratford-on-Avon)
Ridsdale, Julian
Warder, David


Maudting, Rt. Hon. Reginald
Rippon, Rt. Hon. Geoffrey
Walker, Peter


Mawby, Ray
Roberts, Sir Peter (Heeley)
Ward, Dame Irene


Maxwell-Hyslop, R. J.
Robson Brown, Sir William
Webster, David


Maydon, Lt.-Cmdr. S. L. C.
Roots, William
Wells, John (Maidstone)


Mills, Stratton
Ropner, Col. Sir Leonard
Whitelaw, William


Miscampbell, Norman
Royie, Anthony (Richmond, Surrey)
Williams, Dudley (Exeter)


Montgomery, Fergus
Scott-Hopkins, James
Williams, Paul (Sunderland, S.)


More, Jasper (Ludlow)
Shaw, M.
Wilson, Geoffrey (Truro)


Morrison, Charles (Devizes)
Skeet, T. H. H.
Wise, A. R.


Morrison, John (Salisbury)
Smith, Dudley (Br'ntl'tl &amp; Chiswlok)
Wolrige-Gordon, Patrick


Neave, Airey
Smyth, Rt. Hon. Brig. Sir John
Wood, Rt. Hon. Richard


Nicholson, Sir Godfrey
Spearman, Sir Alexander
Woodhouse, C. M.


Noble, Rt. Hon. Michael
Stainton, Keith
Woodnutt, Mark


Nugent, Rt. Hon. Sir Richard
Stanley, Hon. Richard
Wooilam, John


Oakshott, Sir Hendrie
Stevens, Geoffrey
Yates, William (The Wrekin)


Orr, Capt. L. P. S.
Steward, Harold (Stockport, S.)



Osborn, John (Hallam)
Stoddart-Soott, Col. Sir Malcolm
TELLERS FOR THE NOES:




Mr. McLaren and Mr. MacArthur.

New Clause.—(INCREASED RELIEF: PERSONS OVER 65 WITH SMALL INCOMES.)

In section 13 of the Finance Act 1957 (relief for persons over sixty-five with small incomes) in subsection (1)(a)(i), as amended by section 12(7) of the Finance Act 1963, for the reference to £325 (maximum income qualifying for full relief to a single man) there shall be substituted a reference to £350, and in subsection (1)(a)(ii). as so amended, for the reference to £520 (maximum income for full relief to a married man) there shall be substituted a reference to £560; and the like substitutions shall be made in paragraph (b) of that subsection (marginal relief).—[Mr. Houghton.]

Brought up, and read the First time.

Mr. Houghton: I beg to move. That the Clause be read a Second time.

The Deputy-Chairman (Sir Robert Grimston): With this new Clause it would, I suggest, be convenient to discuss new Clause No. 4, "Income Tax: extension of relief for elderly persons with small incomes"; new Clause No. 5, "Income Tax: increase of small income relief"; and new Clause No. 6, "Income Tax: exception in respect of certain widows' pensions".

Mr. Houghton: I am much obliged, Sir Robert.

The new Clause which I have moved, new Clause No. 3, relates to age exemption,

and it is designed to increase the exemption limit for single persons over 65 from £325 at present to £350 and for married couples, one of whom is over 65, from £520 to £560. I am sorry that the hon. Member for Ilford, South (Mr. Cooper) is not here, because I should have been able to tell him that I estimate the cost of this new Clause at about £2 million a year.

Associated with this new Clause is the proposal in new Clause No. 4 to bring into line with the pension age of 60 the age at which a woman can qualify for age exemption. At present, although the pension age for a woman is 60, she is in the same position as a man for this purpose and cannot qualify for age exemption until she is 65. Therefore, there is frequently a gap between 60 and 65 when a woman may have retired and is on a reduced income, but is not entitled to the benefit of age exemption until she reaches 65, which may be five years after she has retired.

New Clause No. 5, "Income tax: increase of small income relief", proposes to increase the limit of income for people under 65 who can get the benefit of small income relief from £450 to £500. I estimate that the cost would be about £1 million a year. I cannot


put any cost on new Clause No. 4, "Income tax: extension of relief for elderly persons with small incomes." New Clause No. 6,"Income tax: exception in respect of certain widows' pensions ", relates to war widows' and industrial widows' pensions which it is proposed to exempt from Income Tax altogether. I will not anticipate the part which my hon. Friends may play in the debate.

On age exemption and associated reliefs, the arguments generally used against proposals to extend age exemption are fiscal or economic arguments. It is said that this is something which cannot be accommodated within the framework of budgetary policy this year. That is why similar proposals several years ago were resisted by the Government. Also, on occasion, the argument is used that if age exemption is carried too far it will aggravate the disparity between age exemption for old people and the amount of tax to be paid by younger people on similar incomes. I will deal with both these points.

I wish to dwell for a moment on the recent history of these reliefs. Small income relief remained unchanged at £300 for six years until it was increased to £400 in 1962. It was increased to its present figure of £450 only last year. Age exemption remained at £275 for a single person and £440 for a married couple for four years—from 1958 to 1961. In 1962, the limits were increased to £300 for a single person and £480 for a married couple. Last year, they were further increased to £325 for a single person and £520 for a married couple. We propose to increase them still further by amounts equal to the last increase—that is, £25 for a single person and £40 for a married couple. Similarly, with small income relief, we propose to extend the maximum income to qualify for this relief by the same amount as last year, £50—that is, from £450 to £500.

On cost, I feel that the Chancellor of the Exchequer could have accommodated an additional expenditure of £3 million on these reliefs in his Budget this year. I do not think that to have extended the relief again this year would have disturbed the balance of his Budget. Moreover, it should be borne in mind that in

this Budget the right hon. Gentleman increased the indirect taxation on tobacco and alcohol. Therefore, he put additional burdens on those to whom age exemption applies and it would have been some compensation for the addition in indirect taxation as well as an additional benefit in itself had the Chancellor proposed once more to increase age exemption.

7.15 p.m.

This is one of the new Clauses to which I referred in an interjection in the speech of the hon. Member for Ilford, South, when I said that certain new Clauses would undoubtedly have found a place in a Finance Bill introduced by a Labour Chancellor this year. I think that I can say with certainty that it would.

As regards the balance between the taxation of younger people on similar incomes and the level of age exemption, we must acknowledge that this disparity exists. It is inherent in the age exemption relief and it has been there from the beginning. It is, therefore, a question of degree. How far should we carry age exemption up the scale of income without giving some corresponding relief to younger people who may be receiving similar incomes and paying tax? A person over 65 years of age on £325 a year exactly is age exempt. A single person under 65 years of age on £325 a year would be paying about £6 4s. tax a year. A married couple receiving £520 a year exactly, one of whom was aged over 65, would be age exempt, whereas a younger married couple with no children on the same income would be paying £12 12s. tax a year.

This may be thought to be unfair to the younger people, but one must bear in mind two things. The first is that the younger people, who are often quoted for the purpose of this comparison, are not, in fact, on that income at all. The average married man is getting an income of more than £520 a year. The average single person is getting more than £325 a year. Tax may be just beginning for them at this level, but in many cases their incomes rise far above it, whereas the older person gets this relief only if his total income does not exceed the limits prescribed for age exemption.

We must bear in mind the relative conditions of younger and older people at about this point in the scale of income. First, we must bear in mind the normal conditions of retirement for the older person, because we are dealing, on the whole, with retired people. Very few others who are not retired could possibly come within the scope of age exemption. For most people, retirement means that they suffer a considerable reduction in income. Frequently their incomes are halved and in many cases more than halved.

The first impact of retirement is, therefore, a drastic reduction in income. If tax must be paid on a reduced income, it is of much more significance to them than if it has to be paid on a rising income or a higher income, as in the case of younger people. A pension may not keep in step with rising prices or rising standards of living.

To the retired person on a small income taxation is a very important factor. He sees in the amount of tax that he pays most desirable and essential things going out of the window. The amount of tax may not be comparatively high, but to him or her it matters a great deal.

There is nothing more moving than some of the letters which I have had in recent days from old people telling me of the problems of retirement. Hon. and right hon. Members opposite have missed grievously the mood of many people who have supported them in the past, but who now complain bitterly about the harsh conditions under which they have to live in retirement. If the Chancellor of the Exchequer were here, I should tell him of one letter which I received from a man who, I am sure, is after his own heart. This man says:
I am politically a Conservative, but with strong Socialist leanings…
This is the type of person with whom the Chancellor of the Exchequer would deeply sympathise. He gives a very encouraging message to my hon. and right hon. Friends and myself, because, he says:
Your work for justice is not going unnoticed by the teaming masses of workers.

That is a very comforting thought. But what he is doing is to complain very bitterly about the unfairness of taxation, direct and indirect, amongst those who

are struggling to maintain their standards on a drastically reduced income.

I had another letter from a night watchman, aged 76. He is getting £3 15s. pension and £4 10s. wages, which is £8 5s. The tax which he normally pays on that total weekly income is 17s. 2d. per week. The other week, another night watchman was off sick so this night watchman did an additional night shift for which he got £1 16s. extra. That week, out of a total income, pension and wages, of £10 Is. he paid £1 14s. 2d in tax, so for the extra night shift he got 36s. and paid out nearly 8s. of it in tax. I think that we can understand the feelings of old people living on the verge of privation and trying to maintain standards and live feeling that taxation bears too harshly upon them.

I have another letter from a man who said:
I have been retired 18 years. I retired on half pay and it is still half pay and now I am treated as a single man because only recently I lost my wife.

He adds:
Surely it is not wrong for me to wish to remain in my own home".

Nor is it. He explains in detail the burden that rests upon him as a householder, as a widower who is now treated as a single person and who does not get the benefit, so far as I can judge, of any age exemption.

I have a letter from another man aged 72. The tenacity that many old people preserve their independence and their useful lives to the end is remarkably moving. Here is a man of 72 whose pension is £3 7s. 6d. and he is doing a part-time job for which he gets £6 14s. 4d. He says:
I am now getting £10 l1s. l0d. per week and I am too old to work much longer and I expect the sack any week.

He gives me a list of his expenditure. He is trying to keep a little home of his own and it is costing him £5 9s. per week in rent, rates 7s. 6d., gas 6s., light 5s., water rate Is. 6d. There is £6 9s. 2d. gone. He has to pay 10s. a week travelling expenses and he is left with £3 12s. 8d. for food and clothing and out of that he has to pay 13s. a week tax.

Of course, he says:
Why tax pensions when a man is trying to keep things going without relief and help?


If a man tries to work and keep things going, why tax the pension money?

We know the classic argument against taxing the pension money—that it would mean exempting the pension of Field Marshal Lord Montgomery as well as exempting the pension for an old man like this. But there is no reason at all why consideration for these old people should not extend to higher tax reliefs. I am sure that younger people would concede to the older person such disparity in taxes between them and younger people that might result from the proposals that we are making.

In 1961, the then Economic Secretary, now Minister of State for Education and Science, replied, on 14th June, 1961, to corresponding Clauses that we put forward at that time and which were resisted by the Chancellor as being inconsistent with his budgetary policy for that year. The following year, the Government did exactly what we had asked them to do the previous year, and the next year, 1963–64, the Chancellor brought forward off his own bat proposals to extend age relief. The then Economic Secretary dwelt for quite a time on the disparity between the level of taxation between older people and younger people that I have dealt with, and he also said, as a matter of doctrine:
The whole concept of a progressive Income Tax is founded on using the size of a man's income as an indication of his relative ability to contribute to the needs of the Exchequer and the economy. I cannot see anything anomalous about a situation in which an increase of income leads to an increased tax liability, no matter whether the extra income comes from a pension increase or from some other source."—[OFFICIAL REPORT, 14th June, 1961; Vol. 642. c. 586.]

We would be prepared to listen to that kind of doctrine if our system of direct taxation were fairer than it is. But when this doctrine is being applied to a small increase in the retirement pension, and when ability to pay is being related to a few shillings extra a week in pension while capital gains of hundreds of thousands and millions of pounds go tax-free, we cannot possibly defend exacting from these old people every ounce of taxation on the ground that it represents their theoretical ability to pay.

I hope that I have described to the Committee that the lives of these old

people leaves them with very little ability to pay. Their reduced income, the increasing need, in many cases, to rely on outside help, the additions to their personal and domestic expenditure through the wearing out of clothing, furniture, carpets and sheets, and the need for the little luxuries that they used to have when they were at work and which, in many cases, have been long denied, are human considerations which should surely appeal to the Chancellor of the Exchequer.

They should weigh far above the arithmetic of the fiscal effect of these proposals on his revenue, unless they are of such a magnitude that he could not possibly entertain them. Even then, I would say that the Chancellor must readjust his budgetary strategy to accommodate relief of this kind needed on such profoundly moving human grounds.

I sincerely hope that it will be possible for the Financial Secretary to give some favourable response to these proposals. I shall not dwell any longer on the reduction of the age of women from 65 to 60 to qualify for age exemption. The case for that is fairly obvious. In the case of men it is related to retirement age and in the case of women it should be the same. As regards small incomes relief, it is a corresponding relief which is usually introduced alongside changes in age exemption. That does not exempt people from tax. What it does for people under 65 whose incomes are within the limits is to extend to them two-ninths relief on investment income to give the benefit of earned income relief, so to speak, of the whole of their investment and other income. That is a very modest concession that is made to people, many of them widows still under pension age. who live on arinuities or fixed incomes of one kind or another and to whom this small concession in taxation is amply justified and badly needed.

7.30 p.m.

I feel strongly on these new Clauses. I assure hon. Members opposite that they are not electioneering. In my view, they are justified in the context of the present situation. I believe that the people would welcome being asked to set themselves new social targets and a new concept of the standard of living of old people. I believe that it will be one of


the marks of our civilisation, for good or ill, how we treat old people in a period of rising incomes and of a so-called affluent society. Surely, we will not tolerate seeing people threadbare, miserable, unhappy and scraping every shilling they can to live while considerable expenditure is going on in other directions which to many old people must seem absolutely unnecessary.

I hope that we get a human response from the Government. This is a matter upon which my hon. Friends must surely ask the Committee to divide if we get no satisfaction from the Financial Secretary.

Mr. R. H. Turton: With a good deal of what the hon. Member for Sowerby (Mr. Houghton) has said I am in agreement, but I think that he overlooked the history. It was not until the Conservative Government attacked the problem of giving age relief for old people that anything was done to relieve them. I do not cast that against the previous Socialist Government. The social conscience had not yet been aroused to it. It was, however, the fact that in 1951 old people were paying tax at the standard rate of 9s. 6d. in the £.
As the hon. Member for Sowerby rightly admitted, we have recently done a great deal to increase the age limits. In the last two years there have been successive increases. I do not think that my right hon. Friend the Chancellor of the Exchequer has missed the mood. He has been in the difficulty that, having given a successive increase for two years, if he were to go on doing it for another year it would look at though there had to be this increase every year. I think that there is a case for altering the age limit this year. The shift of society is such that the old people are losing in the race and the young are getting such large increases in earnings as put the old at a disadvantage.
I hope that when my hon. Friend the Financial Secretary replies to the debate he will help us with the problem of what should be the relation between the growth of the economy and the increase in the age limit. If we are working on a 4 per cent. annual growth, one would expect the age limits to increase by £12 10s. a year so that every two years there would be a £25 limit increase.
I hope that we can remove this question from the arena of party politics or of dividing upon it. Our intention should be to see that the extremely fine record of helping these small income groups by tax relief is kept up to date. The time has come for the limit to be raised by the amount suggested by the hon. Member for Sowerby. If so, however, clearly it could not be done again the following year. The Government might well feel that this is the kind of thing that they would do next year rather than do it three years running.
There is a case for raising the age exemption limits this year because the economy has boomed forward so far. The factor of whether £2 million is involved need not weigh with either side. The fact that these old people have a few shillings more in their pockets each week would not make for inflation. I ask the Committee and the Government to look into the question of the taxation of people with small incomes who are over pension age. We have not dealt with this problem sufficiently clearly or taken enough trouble to inquire into the difficulties of people living on pensions who have got to an advanced age.
I should like more work to be done by a committee of inquiry into the whole position to see whether the right way of tackling the problem is, as we have done, by successive improvements in successive Budgets ever since we introduced this relief in, I think, 1958. I hope that my hon. Friend the Financial Secretary will be able either to give us a concession tonight or, alternatively, to say that he will look into the matter again before Report to see what help can be given.

Mr. J. T. Price: I am pleased that an opportunity now presents itself to have an orderly debate on the subject of new Clause No. 6, "Income tax: exception in respect of certain widows' pensions." When the Committee met a few days ago under your chairmanship, Sir Robert, you had the unpleasant duty of whistling me offside. None of us likes to endure that indignity in the House of Commons, even at the hands of such a good-natured Chairman as yourself. I ventured, however, to ventilate the matters which are set out in new Clause No. 6 during the discussion of Clause 12 of the Bill, which relates to the general levying of Income Tax.
I welcome this opportunity to spend a few moments on the question of how we treat widows in certain circumstances. I do this not from any wish to use emotional arguments or to torture the Committee with the kind of sentimentality that can sometimes surround these questions. I raise it purely as a practical question since the House of Commons has the duty of levying taxation yearly on its citizens. I want the Treasury Ministers seriously to consider the anomalies which are now created in addition to the more widespread anomalies which my hon. Friend the Member for Sowerby (Mr. Houghton) has dealt with so eloquently.
I refer, first, to the war pensioner. The House of Commons and our forerunners for many years have accepted the principle on all sides, regardless of party divisions, that a man who has suffered injury in the service of his country and who is thereby qualified for a war disability pension should receive that pension free of taxation. Whilst I have heard some of the pundits who take a theoretical view of fiscal and revenue matters argue that the House of Commons, which originally introduced this principle, made a mistake in granting tax-free pensions to our war veterans, nevertheless the House of Commons, rightly or wrongly, has accepted the principle.
It would be unnecessary for me to go over the old grounds of whether or not these pensions should be tax-free, but the anomaly that I wish to pinpoint is that which arises in the case of widows. While Parliament has freed the pensions payable to the veterans of war from taxation, as soon as the status of the pension changes and it becomes payable to the veteran's widow, very strangely and paradoxically and, I think, quite indefensibly the Treasury under existing legislation proceeds to levy taxation on the pension. That is wrong.
A man injured in war may enjoy his pension for some years at the 100 per cent. rate or some other fraction according to the degree of disability, and ultimately he may die prematurely as the result of the continuing effects of his injury. Immediately the pension becomes payable to his widow, she is confronted not only with widowhood and all the economic problems that a

widow has to meet unless she has extensive private means—and at a time when her need is greatest and when she is facing the situation of a lower income for the family—with a note from the revenue officers and taxation people telling her to aggregate the pension with any other income that she has.
I do not want to labour the point. It is self-evident. I must plead some responsibility in the matter, for I have been in the House a good many years, but I am astonished, looking at the record, to find that, so far as I can trace, there has never been a debate about this most striking anomaly. Therefore, I plead very sincerely with right hon. and hon. Gentlemen who control the Treasury to give very serious thought to the anomaly and to see whether we cannot in this opulent State, this "go as you please" society, in which many people are having it pretty good, make some gesture to the people who are not having it as good as some others.
The technical expressions which are on the Notice Paper to give effect to what I want to do may need reference back to the Acts of Parliament mentioned, but I think it would be unfair and irregular if we did not in making this plea to the Treasury couple with it a similar plea on behalf of widows who have suffered misfortune through losing their husbands on the industrial front. I know that you, Sir Robert, in view of all the other matters before us, would not wish me to spend time going into the detailed provisions of the Industrial Injuries Act, 1946. But under that Act, in certain circumstances women who become widows as a result of their husbands being killed in industry are entitled as a legal right to a pension of about £200 a year. That is not very much. It is about £3 17s. 6d. a week. There are also allowances for children in certain cases.
But let me take the case of the widow who has no children. She may be middle-aged when calamity descends on the family. She finds herself with a £200 a year pension, not a pension given ex gratia by the Welfare State but one in respect of which there has been a contract of insurance, with contributions paid by the husband at a fairly high rate. There


are far too many in this country, including some hon. Members I am sorry to say, who do not yet draw the necessary distinction between benefits dispensed to those in need without any contributions being paid and benefits for which a contract of insurance exists between the citizen and the State.
Just now my hon. Friend the Member for Sowerby was referring to certain aspects of National Insurance. National Insurance contributions now run at about 11s. a week for a man who is not paying the additional graduated pension contribution—about £28 a year. When he makes up his taxation return, the citizen very often cannot find out what he is paying in National Insurance contributions and what allowance is made because of the effect of P.A.Y.E. and the complicated tables which very few people understand. The citizen does not always understand that, though he pays £28 a year as his contribution, he does not receive a tax concession on that basis. Some concession is given in the P.A.Y.E. figures and the tables, but only a small part of the £28 is free of tax. But when those contributions mature in the form of a death benefit or any other benefit and are taxed in the way they are in the case of widows—I should be out of order if I sought to argue this on a wider basis in respect of other benefits—I say that that is taxation twice over, because the original contributions were not relieved of tax except to a very small extent.
7.45 p.m.
Therefore, I ask that we should consider these matters jointly. We should consider, first, the war widow, who is placed in the unfortunate and unfair position of having to aggregate any other income that she has with the pension. No one suggests that a widow could live on £4 a week in modern conditions and keep a house together. She must try to get some other source of income, and as soon as she does she finds that her pension is aggregated with the other income and taxed.
I hope I have said enough to show that this situation ought to be reviewed, particularly at a time when so many people are getting away with so much. I do not wish to expose myself to the charge of using intemperate language, but I do not think it would be wild to say that so long as this opulent society con-

tinues to tolerate a situation like this it is sacrilege to press the last penny out of these unfortunate citizens who so often have to live on the borderline of poverty.

Sir Henry D'Avigdor-GoIdsmid: The hon. Member for Sowerby (Mr. Houghton), when he moved the new Clause in his characteristically moderate fashion, indicated the expense in which the taxpayers would be involved if these Clauses were to be accepted. The hon. Member for Westhoughton (Mr. J. T. Price), in a very eloquent and attractive speech, did not go as far as that. I suspect that the very modest figures mentioned by the hon. Member for Sowerby would not in any way apply to the much more far-reaching proposals of the hon. Member for Wssthoughton. If the Member for Westhoughton will forgive me, I would like to turn my attention to the other Clauses.
L sympathise enormously and agree to the full with what was said by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). This form of relief—relief for the aged with small incomes—is one that any of us with a constituency life must be continuously aware of and of the hardship behind it. This is a point which is unmistakable and appreciation of it is not limited to any party. Indeed, as my right hon. Friend was at some pains to point out, all the spade work in this has been done by this Administration and their predecessors on this side of the Committee. In this case we can certainly claim not only to have the right ideas, but to have put them into practice. What the hon. Member for Sowerby is advocating so eloquently and sincerely has already been done twice by a Conservative Chancellor of the Exchequer. Therefore, we on this side of the Committee have no cause to hang our heads in this respect.
Clearly, the most vulnerable element of the population are the old, the retired. They are the most affected by the concomitants of a growing activity. They do not join in it and they are in danger of being left behind. It is clearly our responsibility to see that they do not get left behind. Equally—and this is a fair point—if we are to make these reliefs every year three years running, it becomes a Budget "must" that every year there must be a further relief for


old persons. This is a precedent which I do not think can be set up.
Those of us with some responsibility for dealing with charitable funds get very agonising questions put to us and are always in the position of seeming to be hard hearted. Here, however, on this question, we are not dealing with charitable funds, but with resources contributed to the Exchequer by taxpayers. In dealing with applicants for them—and there are innumerable classes of deserving applicants—we really have to have some order of priority. The order of priority that the old living on small incomes should get a relief was clearly established by the Chancellor of the Exchequer last year and the year before. I do not think that any injustice is being done if this year we say that there are other classes who must have a look in.
Although I see the point behind these appeals we must face the fact that if people are in the class of being taxpayers they are still above the level of those who are not. When we are dealing with this problem there is, therefore, a strong case for saying, "We agree that you have a very strong claim and that you should have full consideration. That is why we did this for you last year and the year before. At the same time, we cannot accept that this must be done every year and we cannot establish a precedent of that sort."
My hon. Friend the Financial Secretary has the unwelcome task of replying. I hope that he will take account of the words used on both sides of the Committee about the urgent consideration due to old people with small incomes. I must tell him that I shall not be transferring to the opposite Lobby if he takes the view that this is not a concession which he can make, but I would like him to say that he will think again.

Mr. H. Rhodes: I am very proud to follow right hon. and hon. Members who have spoken in the debate, but I think that the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) will agree that being on an organisation which today receives many appeals from the most-hard-done-by members of the community is an experience that it would do a lot of people good to have. I have

been associated for some time with Roehampton as a trustee and as honorary treasurer for the Roehampton Trust Fund. Every fortnight our eyes are opened as to the trends in our society. The folk who apply are the weakest in our community. Ex-Service men's dependants do not have interests as powerful as business or trade unions to bid on their behalf for what is going. It is not possible for them to make the same noise that other people make for an increased share in any improvement in the standard of living.
We have come a long way from the days when an employer used to take into consideration the pension that a man got when he paid his wages. I remember as a young man that happening on a considerable scale. It is a long time since Is. 6d. was awarded for the loss of an arm, too. But it is not a long time since we have seen reluctance to enable people disabled or bereaved to maintain a reasonable standard by keeping pace with the increased cost of living. In 1919 the second Select Committee on Pensions recommended that widows of war disabled Service men should have their tax remitted. Forty-five years is too long a time for nothing to be done about it.
My hon. Friend the Member for West-houghton (Mr. J. T. Price) put his finger on the problem when he said that it is illogical to concede to a war pensioner that his money should be tax-free and then, as soon as he dies, put it in a different category known officially as "augmented income "for his widow. We are the only major country in the Commonwealth that does not allow the widows of disabled men to draw their pensions tax-free. Canada adopted this practice a long time ago. Australia and New Zealand followed and in 1962 the concession was introduced in the Isle of Man. It was brought in some years ago by Germany and Austria. Germany lost the war, but she can treat her widows a damned sight better than we do here, and it is about time that that anomaly went.
8.0 p.m.
It is argued when Governments are replying to debates of this sort, or to representations made to them by various bodies, that the pension given to a Service man for his disablement is be-


cause of his physical hurt and that in some magic way when he dies the responsibility somehow ceases. But the wife of a disabled man also suffers a physical hurt. She goes through the days when he has difficulties in his employment. After the holocaust of World War I, the economic circumstances of this country were such that it was terribly difficult for a disabled man to get a job. He was not wanted. That was the time when the wife was standing by him and when she, too, was suffering.
Hon. Members can go to Roehampton Hospital now and see the results of World War II and World War I. Every now and again, these men have to go back, especially if they were prisoners in the Burma Road episode. They are constantly going back and coming out again. They get no advancement in their jobs, because their bosses know very well that they are subject to having a lot of time off and that they cannot be relied on regularly. There is also the difficulty in that family that the wife has to visit her husband in Roehampton. A man cannot be expected to remain there absolutely secluded and cut off from society.
We have not faced up to our responsibility to our disabled and their dependants from both world wars, but particularly from the first one. It is only now and again, when consciences quicken and people are moved and feel that they can afford it that concessions of this sort are made.
I agree with the right hon. Member for Thirsk and Malton (Mr. Turton) that it is time that we got down to a humane study of this problem to see what the implications are and how to deal with it on a definite and permanent basis. I put it on record that Germany can afford to pay her war widows and not deduct tax. For one reason or another—perhaps beacuse of the fear of anomalies—we do not, and it is high time that we did. If the Government regard the pension as paid for a physical hurt and say that the character of the pension is altered when it is paid to a widow, I say that that argument is not valid.
The widow's pension is not related mathematically to the income of the household at the time of a man's death. For instance, the widow of a general

gets more than the widow of a captain or a private. A widow's pension should be regarded as compensation for the loss of a husband's companionship, earning power and presence in the family. On those grounds I appeal to the Financial Secretary, if he cannot make the concession tonight, at any rate to make some effort to give us some encouragement. There is no doubt that these people—relics of two world wars as many of them are becoming—are not receiving their just due in a society which is as prosperous as ours.

Dame Irene Ward: I always have to thank the hon. Member for Sowerby (Mr. Houghton) and other hon. Members on either side of the Committee for putting this case extremely moderately and very humanly. I am always delighted to add what pressure I can on the appropriate Treasury Ministers, and I hope that some result will follow.
My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) pointed out—and I am very proud to acknowledge it—that the whole basis of the new Clauses which we are now discussing emanated from a Conservative Government. I often talk very strongly to some of my Ministerial colleagues, but I always like to pay tribute to the present Minister of Defence who, as Chancellor of the Exchequer, first initiated the taxation concessions for those with small fixed incomes. On that score I found him a very good Chancellor and always extremely sympathetic.
I am bound to add that when my right hon. Friend became Minister of Defence he was not: so good at dealing with the Chancellors who succeeded him. It is one of our problems that if we get a sympathetic: Minister who is transferred to another Ministry, he does not find it so easy to continue alterations which he had instituted when he had the power to deal with taxation. However, I am always grateful to the Minister of Defence for his initiation of many of these changes to the benefit of the elderly. I listened with great interest and in complete disagreement to my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid). I thought that he was preparing a cushion for my hon. Friend the Financial Secretary, but I am now glad that I did not rise to speak


earlier, for I can now deal with what my hon. Friend said. He said that we could not make a concession of this sort three years in succession. I hope that the Financial Secretary will not use that argument, for increases in the cost of living for these people go up year by year, and if we are to deal with one aspect, we must deal with the other. I think that it is fair to say that.
The cost of things which matter to the people living on small fixed incomes continually rises. If my hon. Friend the Member for Walsall, North takes the view that one cannot do everything every year, he must tell me and the Committee what he proposes to do to enable these people with limited incomes to increase them. One cannot make life fair, nor can one make life equal. Some people have more luck in life than others do, but there is one important factor in the lives of these people who live on small fixed incomes. They have no possibility of increasing their incomes, whereas young people, if they are lucky, and if they have the initiative and the brains, can go up the ladder and increase their incomes.
The problem facing the elderly who are living on small fixed incomes is how to extend their incomes to meet the ever-increasing cost of living. That is the point to which I want my hon. Friend to address himself.
The cost of heating, of electricity, of gas, and of coal rises every year.

Mr. Cyril Bence: So do rates and rents.

Dame Irene Ward: I thank the hon. Gentleman for being so enthusiastic in supporting me. Rates go up, and so do rents. How are these elderly people to meet their increased rate obligations? I do not know whether my hon. Friend the Member for Walsall, North, with his good financial brain, can tell us how to limit the rise in rates every year. I like to knock down arguments when I do not think that they are reasonable, even if they are put forward by my hon. Friends. I can deal with Ministers, because I can get at them fairly often, but I cannot always get at my hon. Friends who put forward false arguments.
My hon. Friend the Member for Walsall, North does not understand the

situation as well as my right hon. Friend the Member for Thirsk and Malton does. When my right hon. Friend was at the Ministry of Pensions and National Insurance, he was a very sympathetic Minister, and he had some very good ideas, but I cannot remember which Chancellor of the Exchequer downed him. The trouble is that one cannot get at Treasury Ministers. They are encased in a sort of cocoon, and one cannot get at them. They do not have to deal with Departmental difficulties. They do not have to deal with individual people. That is the real problem, and that is why I want my hon. Friend on the Front Bench to tell me how, unless the House of Commons does something to help, the people we are talking about can increase their incomes.
My right hon. Friend the Minister of Power, in his debonair way, announced that the Chairman of the National Coal Board had decided that people can buy coal at summer prices which are considerably lower than those charged during the winter months, but, of course, the price is to rise even higher next winter. How are these people who live on limited incomes, and who have to budget carefully every week, to find the additional money to buy extra supplies of summer-priced coal, always assuming that they have somewhere to store the coal?
8.15 p.m.
The Treasury looks at the global situation of our affluent society and says that there is no problem, and, of course, the Opposition did not do so well in this respect, either. Hon. Gentlemen opposite often advocate spending tremendous sums of money. This afternoon I was not allowed to ask a supplementary question after the Chancellor of the Exchequer, I think it was, said that rates would probably rise every year. If the Opposition happened to win the election, which heaven forbid, I do not know whether rates would come down. I accept that many hon. Gentlemen opposite are as enthusiastic as I am to try to do something to help these people, but the things which they have promised will mean an annual rise in the rates, and the people living on small fixed incomes will have no chance of keeping pace with the rise.
A person is entitled to earn £15 interest a year free of tax on money deposited in


a savings bank, but how can people living on small fixed incomes find that much money to tie up in the Post Office? The answer is that they cannot. The difficulty is that these old people are full of anxiety. They are straining every nerve, and economising in every way, to try to eke out their incomes. Telephone charges continually rise. Transport costs continue to go up. We cannot get a satisfactory solution to the suggestion for concessionary fares. Here is an opportunity to give these people some help. The answer which comes glibly from my Front Bench is that these people represent a limited section of the community.
One thing that I have learned from being in the House for a long time is that one must not go for too much at one time. One must just make little digs now and again, and if one can make a step forward in the appropriate direction, in the long run one does much better than talking in these great, grand, and overall terms. Here is an opportunity for the Treasury to give something. The policy of the Conservative Party is give now, so let us get on with it.
I try to be realistic. I get "fed to the teeth" with party politicians, and that goes for the other side more than for my own. They will not get down to the little details, and I am sure that that is because Treasury Ministers have to deal with big problems. I am certain that when there is a meeting between Ministers of great Departments, with responsibility for obtaining money for the things that are necessary in the national interest, these small details are put at the bottom of the agenda, and that because Ministers are tired at the end of the day they do not approach the problems facing these elderly people in a humane way.
Here is something that we could do to help the widows of men who lost their lives in the two world wars and, indeed, in industry. Quite often Prime Ministers in my time have said, "Tell the people." If we do tell the people we are often surprised at the sympathetic response we get. When the Chancellor increased the taxes on wines, drinks and cigarettes it was very irritating to those living on small fixed incomes, but I am sure that those people would far rather have rate relief, because rates have to be paid whereas one does not have to buy cigarettes or drink.
We have good, bad and indifferent people in all classes of society. We have good, bad and indifferent people in the House, whether among the Opposition or on the Government side. If a person does not pay his rates the local authority says, "We will take out an order for eviction." The private landlord does the same. No doubt they feel that it is in the interests of the general community that they should collect what is fair. But will the Treasury Minister tell us how, unless we accept some of these Amendments, these people are going to increase their incomes so as to meet the increased cost of living?
I am devoted to the present Chancellor of the Exchequer. He is a very nice man, but I wish that I could get at him more often. This is the pleasant side of having been in the House of Commons for a long time. I would not mind having a bet that when the Treasury Minister replies he will say, "Of course, my right hon. Friend will look at the implications of these new Clauses." If we look back over the years, however, we find that whenever any Treasury Minister has been hard put to it he has always said, "I will look at this." These Ministers are sympathetic when one talks to them. They are sympathetic in the human frame, but when they get into the old Treasury they forget all about that. I have just had the most fierce correspondence with the present Chancellor. When Ministers say that they will look into the matter we all think, "This is absolutely marvellous. This is a genuine chap, who will really do things. Next year something will happen." But he never does anything. That is the whole point.

Mr. Arthur Lewis: Just Tory promises.

Dame Irene Ward: It is much worse on the other side of the Committee. Let us face it. This side has been able to keep the economy reasonably sound. [Laughter.] Oh, yes. I well remember 1951. [HON. MEMBERS: "Oh."] Oh, yes. I have; been in this place for many years. I remember 1951 quite well, when there was pressure to raise retirement pensions. The Labour Government would increase the pensions only of those who had been born before a certain


date, because they said that we did not have the money to do more than that.
I remember those days very well. I remember the pressure that was brought to bear, and what happened. It gave me a greatly increased majority in my division, because I did not fail to tell my constituents what was happening. Before money can be spent it has to be provided. We provide the money. All that we are arguing about is how it should be spent. The party opposite did not provide the money. That is the difference between the Opposition and ourselves.
The Chancellor has written me some nice letters, in which he has said, "I always look at these matters year by year." That is not the reaction we get from the Treasury spokesmen in the House. I have always believed that when we have made out a good case something will be done as a result in the following year. It is true that during the last few years we have had increases in the amounts of money that can be obtained without having to pay Income Tax, as my hon. Friend the Member for Walsall, South has pointed out, but we are still waiting for taxation relief for the spinster living on the housekeeper's allowance.
The last time this question was raised, when the case was well put by many hon. Members, the Chancellor said, "Of course I will look at this." A jolly good case was made out, and when I went to see my right hon. Friend face to face I thought that we had won. I came to hear the Budget speech this year and I waited for my little sop—and it never came.
That is what I object to in Ministers. When they are on a spot they speak in a sympathetic and charming way, and we think that we have made out a jolly good case and that the House has spoken for democracy. But democracy gets forgotten. It does not matter whether or not the House speaks with one voice; the Executive cannot do so. It is not interested in democracy.
My right hon. Friend the Member for Thirsk and Malton and I have fought a lot of battles together. I still have a lot of battles to win. When my right hon. Friend speaks I hope that others who have not had as much experience

as he has will listen to what he says. I do not know whether I should be in order if I chanted in the House, but when I hear the Treasury Minister winding up I would love to chant—I have a singing voice, like a corncrake—"How are these people to extend their incomes to meet the difficulties of modern life in an affluent society unless we do something to help them?"
That is the theme. The Tory Party is very keen on themes, and here is a jolly good one for them. Let us have it, "How can those living on small fixed incomes, with no possibility of expanding their incomes, meet the increased rates, the increased heating costs, the increased rent and the increased transport costs?". The only prices which have gone down are for those things in which one can economise. There are some things in which one can economise but others in which it is not possible. I put this theme, "How are these people to expand their incomes?".
A long time ago I had the pleasure of introducing the first Private Member's Bill which gave the right to local authorities to pay pocket money to people who went into institutions—now known as Part III accommodation. I am glad to say that Part III accommodation has improved out of all recognition and that old people who are ill and go into such accommodation are extremely well looked after. Whenever we have increased National Assistance rates, the pocket money for these people has been increased, and I am glad that that is so.
If the people for whom we take full responsibility may always receive an addition to their pocket money, why cannot the same consideration be given to those people who try to keep their own homes going and try to be independent? These people have served the country very well in the past. But for many of them we should never have won the war. Why cannot they have the same consideration as those for whom we take full responsibility?
My hon. Friend the Treasury Minister has a lot to answer. I am looking forward to having all these new Clauses accepted.

8.30 p.m.

Miss Margaret Herbison: I am sure that we all enjoyed


the contribution of the hon. Lady the Member for Tynemouth (Dame Irene Ward), but some of us were aghast when in the middle of her speech she said that she was sick and tired of party politics, because at the beginning of it, in the middle of it and two-thirds of the way through it she was ramming down the throats of those on this side of the Committee her own Tory Party philosophy. I do not mind that at all, because I shall for ever try to drive home Labour Party philosophy, but I never say that I am sick and tired of party politics.
The hon. Lady was very generous. She said that she knew that there were certain hon. Members on this side of the Committee who were as enthusiastic as she was in support of the people who live on small fixed incomes. I began to wonder whether I was blind or had not read the Notice Paper properly. I looked at it again. New Clauses Nos. 3, 4 and 5 all deal with people on small fixed incomes, but I did not find the hon. Lady's name to any of them, nor did I find the name of any hon. Member opposite attached to any of these three new Clauses.

Mr. A. Lewis: Is not my hon. Friend aware that the hon. Lady will vote for the new Clauses? She does not have to put her name to them. The main point is that she intends to vote for them.

Miss Herbison: I think that it is important to make the point that all the names attached to these new Clauses are of hon. Members on the Front and back benches of this side of the Committee.
I turn to the speeches of the right hon. Member for Thirsk and Malton (Mr. Turton) and the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid). The hon. Member for Walsall, South said that there- would be no injustice at all if the Chancellor this year felt that he could do nothing to help those on small fixed incomes or to give greater relief to persons over 65 years of age who are living on small incomes. I disagree with him profoundly on that point. These people suffer just as much from the rise in the cost of living as does any worker in the country. Indeed, I feel that if we had a separate cost-of-living index for the older people we should see that the rise in the cost of living hits old people much harder than it hits younger people. If

we could say that we would call a halt to the rise in the cost of living for old people, there might be some sense in what the hon. Member for Walsall, South said, but there is no sense in his claim that there would be no injustice if this year the Chancellor of the Exchequer felt that he could not accept the new Clauses.
These are the people who have worked hard all their lives. No matter how reasonable they are in their outlook, it is difficult for them to understand that a Government who cannot find £2 million or £3 million, which I understand would be the amount involved in implementing new Clause No. 3, refuse to do anything at all about capital gains. People who are already very wealthy can make £1 million overnight and not a penny goes to the Chancellor of the Exchequer.

Mr. Kenneth Lewis: That is not true.

Miss Herbison: Of course it is true. If I had the time, I would give way to the hon. Gentleman, but some of his hon. Friends have spoken for so long that I will not give way, because others wish to speak. The hon. Gentleman knows full well that millions of £s have been made overnight and not a penny of Income Tax has been paid.

Mr. Lewis: Not true.

Miss Herbison: It does not matter how often the hon. Gentleman says "Not true", because there are even people on his side of the Committee who will confirm what I am saying.
Again, these reasonable old people find it difficult to understand a Government who allow such huge expense accounts to firms but refuse the modest increase for which we ask. It would turn out to be an increase in income if the new Clauses were accepted.
In new Clause No. 4 we ask that the age of women should be lowered to 60. When the age of 65 was originally chosen by the Government, was it chosen because 65 was considered to be the normal retirement age? If that is why it was chosen, the normal retirement age for women is 60. Many women are forced to retire at 60, even though they wish to continue to work. When they retire, they suffer a drastic cut in their


income. They may just have the basic pension of £3 7s. 6d. a week, as it is at present, and a small occupational pension. If the retirement age is the criterion, the retirement age for women is 60, and new Clause No. 4 should be accepted.
My hon. Friends the Members for Ashton-under-Lyne (Mr. Rhodes) and Westhoughton (Mr. J. T. Price) made an excellent case for new Clause No. 6. What is the reaction of the Treasury to that new Clause?
The hon. Lady the Member for Tyne-mouth made a great song about the rise in rates. I shall be partisan now. The biggest item in the rate burden is education. The Labour Party has a policy on education which will relieve the rates of some part of that burden.
I hope that the Financial Secretary will comment on the suggestion made by the right hon. Member for Thirsk and Malton. He said that the Government were aiming at an annual increase in our national prosperity of 4 per cent. and he suggested that that might be the basis for each year raising the fixed income limit. There is a good deal in his suggestion, but before the Government decide on it I should like them first to look at the present limit to see if it is sufficiently high. That should be done before they make a decision to raise it to meet this 4 per cent. increase in our national prosperity.
We are told that the Conservative Government have raised the basic pension five or six times since taking office. I am not concerned with that, and any increase the old people receive has my support. We must decide whether £3 7s. 6d. is now sufficient for an old person to live on. The answer must be "No". That is why, although I am very much in agreement with the suggestion of the right hon. Member for Thirsk and Malton, I want the Government, before accepting it, to consider whether the present figure should be raised.

Mr. K. Lewis: I am glad to have this opportunity to comment on the remarks of the hon. Lady the Member for Lanarkshire, North (Miss Herbison), because she would not give way to me in her speech. She presumed on one point and was incorrect on another. She

presumed when she said that my hon. Friends and I could not have any idea what it was like to live on a small fixed income—

Miss Herbison: I did not say that.

Mr. Lewis: If the hon. Lady will read her speech in tomorrow's OFFICIAL REPORT she will see that she did. Secondly, she said that people could make £1 million overnight.

Miss Herbison: Cannot they?

Mr. Lewis: I do not want to make too much of that, except to say that it is not correct. The present Government have brought in a capital gains tax and if people should make £1 million overnight, or within six months, they must pay tax on the money. This shows that the hon. Lady's statement was incorrect.
It is, of course, true that people make capital gains, but it must be remembered that they are providing a great deal of work for people in industry and elsewhere. In any case, many of the people employed in those industries are themselves very large holders of equity stock through unit trusts and so on and they, too, make capital gains, although on a more modest scale. Doing this is a national pastime, and the hon. Lady knows it. It is also a good thing for the economy.
Since coming to the House of Commons I have noticed that pleas are always made to Chancellors after every Budget. Each year we spend a great deal of time discussing, on the present Budget, what should be done in the next and I thought that my hon. Friend the Member for Tynemouth (Dame Irene Ward) was a little unfair to herself when she said that over the years, if one considered what Treasury Ministers had done, it would be seen that they took no notice of the representations made to them in Parliament when pleas were made by hon. Members in Finance Bill debates. My hon. Friend even applied those remarks to pleas which she had made.

8.45 p.m.

Dame Irene Ward: If my hon. Friend will forgive my saying so, it is he who is now falling into error. I never said that they never did. I paid tribute to the whole introduction by the present Government of special reliefs in respect


of age. What I said was that when a Treasury Minister gets into a difficult situation he always falls back on saying that he will examine the position. If my hon. Friend likes to have a cup of coffee with me I will let him know what the present Chancellor of the Exchequer said a year or two ago, and he will find that the Minister has not taken any action at all on that.

Mr. Lewis: Nevertheless, although it is obvious that Chancellors do not meet every plea made to them, pleas have been put by many hon. Members on both sides, including the hon. Lady the Member for Lanarkshire, North, to Chancellors, who have met them in some subsequent Budget. Our record in such matters as we are now discussing is very good.
I have, however, a certain amount of sympathy with new Clause No. 5. I do not know whether my right hon. Friend is prepared to do anything about it on this occasion, but I hope that he will bear it in mind for the future. I believe that people on low incomes come into taxation at too low a level, and there is a lot to be said for taking away a certain amount of tax at least every two years. I know that we have done it in the last two years but we might well look at the possibility of doing it every year, because each year—not even every second year—wages go up.
It is important to remember that young and middle-aged people can look forward to continual increases in wages and to advancement in their jobs. That does not apply to retired people, whose only hope is either an increase in their basic pension, whether it comes from the State, or partly from the State and partly from their firm, or from the Services, or from a mixture of pension and private income. As their increases are limited, we should bear those people in mind—

Mr. Walter Monslow: Then would not the hon. Gentleman agree that what he should do is to put to the Minister exemption at a higher rate?

Mr. Lewis: I want the Minister to consider raising the level year by year. I believe that at present anyone on a pension of about £11 a week still pays about 5s. a week in tax, and I do not

think that such a weekly income justifies that amount of tax.
Further, it is a little doubtful whether the return is worth the collection. The Treasury should try to assess how far this small amount is worth collecting. There is a certain amount of administration and paper work involved, and the collection of 5s. a week, even acknowledging the fact that it is collected yearly, is a doubtful exercise from a purely administrative point of view.
Many of my hon. Friends have already pointed out that we have a progressive record in this direction. I am sure that that will be recognised in the country, and that it will be acknowledged that if we are returned to office well shall continue to have a progressive record.
On the subject of the widows and the disabled who are affected by the other two Clauses, I was interested in the speech of the hon. Member for Ashton-under-Lyne (Mr. Rhodes). I consider him to be a good friend of mine, and he ought to look upon me a good friend of his, because we fought each other in a General Election and he won. I am sorry that he is not now in his place. I could not go as far as he did in dealing with the widows and the disabled. We should not get ourselves into a position where we acknowledge that the widows and the disabled are completely incapacitated for any work. We should not pay our pensions purely on the basis, as the hon. Member seemed to suggest, of some sort of compensation. There are many widows and disabled who go out and earn their living. They are to be congratulated on doing that. They make an effort and do extremely well.
I do not want to see the Government paying out pensions on top of a good earning capacity. I believe that both political parties will have to consider in the next few years where they are going on this whole social issue. This is the important social decision which must be made. We must use our financial resources in paying pensions and other social benefits on the basis of need.

Mrs. Slater: A means test.

Mr. Lewis: I did not say on the basis of means. T said on the basis of need.


If we are to make the best use of the money available, and if we are to deal rightly with these people who must have help in this affluent society, we must give it where the need is greatest and not spread it so far across the board that the people who need help are not able to get sufficient of it.

Mr. Bence: Would the hon. Member care to look at the Notice Paper and read the new Clauses? We are not asking the Chancellor to give anybody a pension. We are asking Him to relieve low incomes and pensions from taxation.

Mr. Lewis: I am well aware of that. I was discussing the Clauses which deal with the widows and the disabled. I was making the point that it does not necessarily mean that because they are widows or are disabled they must be given a particular treatment if they themselves can earn money. We know that many disabled people earn good incomes, and we know that many widows earn good incomes and make progress in their jobs so as to increase those incomes.
The hon. Member for Sowerby (Mr. Houghton) said that he and the party opposite were not electioneering in putting down these new Clauses. I accept that they are not. Taking these Clauses with the second and third new Clauses, dealing with the reduction of Purchase Tax, the hon. Member can have it the way he wants. I accept that he is not electioneering on these Clauses and that he is quite prepared to find some money to meet whatever may be the cost involved in them.
The hon. Member went a good deal further when he was talking about cost, because he said that even if the cost represented a very large slice of taxation my right hon. Friend the Chancellor of the Exchequer should recast his whole taxation system to meet it. But all we get from the hon. Gentleman and his right hon. and hon. Friends is a suggestion that we should pay more to meet these three needs and, at the same time, reduce taxes by means of the measures which they proposed in their two new Clauses dealing with the Purchase Tax. This is the old argument of the last General Election. They will find the money from somewhere, but they do not say where. They will reduce taxes and, at the same

time, find money for the kind of need expressed in the three Clauses that we are now discussing.

Miss Lee: The debate this evening is about whether or not it is reasonable, given the state of, Britain's economy, to ask the Government to make certain concessions to widows, the disabled and others who are having a particularly hard time.
I object to the form of reasoning used by the hon. Lady the Member for Tyne-mouth (Dame Irene Ward) because it is quite improper to talk as though individual Ministers made decisions. That kind of picture is very amusing, but we all know that, whether they be junior or senior Ministers at the Treasury or whether they be individual Departmental Ministers, decisions are collective Cabinet decisions, and if any individual Minister objects strongly to the collective decisions of his Cabinet the honourable course for him is to resign.

The question before us is, are we getting our priorities right? Once more, we hear the fallacious argument that the division of wealth in this country is just about perfect under the present Government and that, before we can consider any humane amendments, we must wait for an expansion of the national economy. I am all in favour of an expansion of our economy and I believe that it can be achieved, but, at any given time, we are entitled to look at how our nation's wealth is being spent and ask the people to judge whether or not it is in keeping with sound economics and plain fair play.

For me, the most interesting figures which have emerged from the Budget debates have been not so much those reflecting movements of wages, profits and the rest from year to year but those which, in the recollection of the Committee, were brought forth, sometimes in speeches, sometimes in answers to Questions, reflecting trends covering a number of years. We got the figures of the various trends in the 12 years ending 1962. These were given in answers from the Government's own Ministers, assisted by their civil servants, and they showed that, in those years, there was an increase in wages of 101·6 per cent. but, in the same period, there was an increase in profits of 169 per cent., there was an increase in rent and rates of rather more than 169


per cent., and that the ordinary industrial worker making his extra contribution towards National Insurance found the amounts he paid going up by as much as 190 per cent.

9.0 p.m.

We state firmly from these benches that it is manifestly unjust to allow the gap between rich and poor not to be narrowed, not to be made stationary, but actually to be increased under Conservative Governments during the past 10 or 12 years. That is precisely what has happened. A great deal of hardship could have been avoided. There is nothing financially unreasonable about our new Clauses.

The hon. Member for Rutland and Stamford (Mr. K. Lewis) said, quite properly, that a person with a wage of about £11 a week would be paying 5s. or 6s. Income Tax. But he is well aware that the lower the income the higher the proportional contribution made to the Chancellor of the Exchequer from indirect taxation. A rise in the price of bread, milk or meat means very little to those budgeting in terms of £1,000, £10,000 or £20,000 a year. But if one is budgeting in terms of a widow's pension or a disabled Service man's pension, or if one is living on a small fixed income, such increases can be terrifying.

It is, therefore, no use pretending that there is not a very sharp division between the two sides of the Committee. It is no use pretending that those living on small fixed incomes would not find it a benediction if they had no longer to worry about doctors' prescriptions. There is a certain impatience among hon. Members opposite when this subject is mentioned, because 2s. an item means very little to them. But, as has been stressed, it is the older people with no means of earning additional money who are hardest hit by this. It is the older people in the main who have to spend most on medicines, doctors' prescriptions, and so on. That is one thing with which we should deal at once. In that sense we are genuinely trying to help those living on small fixed incomes. I ask hon. Members opposite how they can at one and the same time pretend to befriend these people and not take advantage of the opportunity to deal with these matters.

Another point made by hon. Members opposite concerns the concessionary

fares for old-age pensioners. All the medical evidence tells us that one thing from which many people suffer is immobility. The cost of the bus fare to get to the opposite end of the town, or even to reach the town, is such that they have to think twice before they can move. People in Glasgow, for instance, where they have cheap concessionary fares, know what they mean in terms of health and of interest in life.

Hon. Members opposite ought to know these facts as well as we do. The hon. Member for Rutland and Stamford reproached us in the opening sentence of his speech when he said that we on this side talk as though he and his colleagues do not understand the problems of ordinary poor people. Surely we are entitled to ask him with all courtesy, "Do you really understand them?"

Mr. K. Lewis: If I can answer the hon. Lady, I think that I should do so. I believe that a lot of my hon. Friends are in a similar situation to mine. I happen to have two old people myself who have a very small fixed income.

Miss Lee: With all due respect, that is an irrelevant answer. I have never made a personal attack on any political opponent of the ground that he was not compassionate in dealing with invalids and old people who came within his immediate orbit. It is a great luxury to be able to give; to those whom we love and to those close to us, but the great austere public test is, are we prepared to regard all old people as our parents and all children as our children, and are we treating all those who have suffered particular cruelties in life—those who have been wounded in the wars and in industry and those suffering from chronic bad health—as we treat those nearest and dearest to us?
My charge against the Government is that they are not doing this; that over the past decade and more they have allowed profits to rise too much in advance of wages; that they have given to the workers with one hand and taken away with the other; that they have their priorities wrong, and that they will continue to have their priorities wrong because their paymasters will not allow them to have our kind of priorities.
Therefore, I shall go into the Lobby in support of the new Clause. I will


not be impressed if an hon. Member opposite here or there goes into the Lobby with us, because the judgment is not an individual speech or an individual vote but where our priorities and faith lie in dealing with these broad questions. The Government will fail us tonight for precisely the same reasons as they have failed us for more than 12 years.

Mr. James Griffiths: I offer my apologies to my hon. Friends that I was not in the Committee when these new Clauses were moved, but I have listened to the speceh of my hon. Friend the Member for Cannock (Miss Lee) and others, including that of the hon. Member for Rutland and Stamford (Mr. K. Lewis), and there are one or two words that I should like to say to the Chancellor and to the Chief Secretary who, like myself, had the privilege of serving as Minister of National Insurance.
I think that in the field of social policy there is a great deal of concern about the people who are covered by these new Clauses—people on low fixed incomes—and in particular about the fact that our existing provisions under the National Insurance Act and the National Assistance Board, with its grants and allowances, are failing to discover large numbers of old people who are living in dire poverty.
There have been researches made into this matter and perhaps these figures will help us to consider at least some, if only a part, of the people with whom we are concerned—the people on low incomes. Researches have been made by very competent people who tried to ascertain what the Minister of Pensions and National Insurance so far does not know and the National Assistance Board does not know: how many elderly people there are in this country in receipt of retirement pensions under the National Insurance Act who if they went to the Assistance Board this week and it assessed their income and related their income to the present scales, would receive assistance.
In other words, they are living under the income which we have provided by our regulations under the National Assistance Act as the minimum subsistence level. There are large numbers. I do not know whether the Chancellor

or the Financial Secretary would care to deny these figures, but competent observers have estimated that there are at least three-quarters of a million people in that category—old people who are living at a rate below the National Assistance rate and who are not going to the Assistance Board to ask for a grant because they feel mat it would be undignified. The last thing in the world that we should do is take away from them their dignity.
I was very glad to hear that my young friend Mr. Brian Abel Smith is one of Professor Titmuss's able team who is to make an investigation into the problem of poverty among old people. What we are asking for is a very small contribution towards this problem, but it would be a contribution and it would help at least some of them. I hope that very shortly we shall have a new Parliament and that it will deal very quickly indeed with this problem of the hundreds of thousands of old people whom we miss entirely and who are living in dire poverty.
I was glad that my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) raised the question of the disabled pensioner and, for example, the widow who receives a pension under the National Insurance Act when her husband is killed by accident at his work, or dies as a result of disease contracted whilst at work and scheduled under the Act. My hon. Friend suggested that that widow's pension should be exempt from Income Tax.
I do not object to the fact that the hon. Member for Rutland and Stamford is not now present—I have not been here myself during part of the debate—but I am not sure whether the hon. Member appreciated what he was saying. He spoke, for example, about those who receive pensions under the Warrants for disablement while in the Services and those who receive disablement pensions under the Industrial Injuries Act. The whole purpose of the scheme was to provide for payment—to use the official phrase—for loss of faculty, to be measured by a medical board, which decides that the person who is disabled, either in industry or in war, has suffered a loss of faculty—it has nothing to do with loss of earnings—and his pension is


awarded at a percentage rate of the loss of faculty which he is adjudged by the board 1o have suffered. I understood the hon. Member for Rutland and Stamford to propose that all those pensions should be based on need. This would be a complete departure from everything which has been done in this direction by the House of Commons for years.
I support my hon. Friends in their new Clauses. I have been disturbed recently to find that there are several hundred—possibly more than 2,000—men who receive benefit under the Industrial Injuries Act whose benefits are so low that they have to ask for assistance. This disturbs me greatly. I had the privilege of piloting the Act through Parliament in 1945. It was the first Act in that new Parliament. It was a great departure. I know something about this subject. For the first time in the history of the country, and possibly in the history of any industrial country, we transformed the scheme, and the worker now pays a direct contribution towards it. My hon. Friends propose that some relief should be given to these people.
This debate has been about a problem which will be with us very much in the months ahead. I think it was Galbraith who said that one of the dangers of the age in which we live was that we may create a society in which there is the private affluence of some people and public squalor in the same society. There are a large number of people who are living on standards lower than those laid down by the House of Commons for the payment of National Assistance. This is one of the major social problems which must be tackled by the new House of Commons in a few months' time.
In the meantime, as a final gesture, surely it is not too much to ask the Government to accept all these new Clauses, each of which would bring relief—not a great deal, but some—to these people who are living on very low incomes and for whom life must be a terrific battle to try to make both ends meet. In that way, we would bring relief to some of these people who are having a tough time in our society.

9.15 p.m.

Mr. Bence: I am grateful to my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) for taking up the point made by the hon. Member for Rutland and Stamford (Mr. K. Lewis) about the reason for granting pensions, but I was hoping that my right hon. Friend would also refer to another statement that was made by the hon. Member. I am sorry that he is not present, because I shall quote him. I do not want to misquote him, as I do not like to misquote anybody. I must, however, quote a statement by the hon. Member which I regarded as significant.
The hon. Member justified large free capital gains and capital appreciation because, he said, this meant that there was full employment. He said that this gave plenty of employment to people, and thereby he let the cat out of the bag. In our modern capitalist system of society, when we have full employment some people get capital appreciation from it and pay no taxation on it. This is one of the grave dangers to our economy. There are far too many people who are able to rake off capital appreciation arising from our scientific and technological progress and full employment.
The Chancellor of the Exchequer, who is the Chairman of the N.E.D.C., and the Prime Minister have put forward the principle that our people must be governed by a guiding light. The guiding light in respect of wage earners and others is that their wages and purchasing power can increase only in accordance with the growth of the economy. But what about the people living on fixed incomes? I have been told many times that peope living on small incomes from investments are suffering from the speculative mood in which people are buying and selling investments for capital gain and not income.
Many elderly people have told me that they suffer from what has been happening particularly in the last six years. They believe that they are suffering because people are operating for capital appreciation instead of for income out of investment because on income they have to pay tax, whereas on their capital appreciation they pay


no tax. The small saver suffers considerably as a result of this. But no guiding light is given by the Chancellor in that respect.
The only guiding light is to the wage earner, who is told that he must not seek wage increases. What about the sick? What about retired people who suffer under our system of society in which we are trying to work efficiently and economically and which we are trying to improve? There is something which one has seen since 1945—indeed, since 1938—in any business or Department of State. One can see it if one reads the Reports of the Estimates Committee. Ever since I came to this House, in 1951, every Department of State and every section of business in the country has budgeted to spend more the following year. In every Estimates Committee Report one can see the trend throughout the Departments of State; if they spent £50 million last year, they will have to spend £55 million next year. All of them budget for an increase in expenditure next year because they know the graph is upwards all the time and that the value of money falls every year.
Most sections of the community can overcome the fall in the value of the unit of money by various pressures which they can exercise—by trading associations, through agreed prices, by organised trade unions, by professional organisations and so on. By all sorts of pressures in various directions they can to a certain extent maintain their material standards by overtaking by means of increases in income the fall in the value of money. People who cannot do that are those on retirement pensions and small fixed incomes. Those who, by investment in Government stocks, or in equities or other forms of investment, get a small fixed income in their old age have no power, no control. They cannot increase the real value of their money.
There is one way in which the Chancellor can help them. I would not advocate a sudden deflation in order to increase the value of money units, because that would probably lead to a calamitous situation for the country and an economic upheaval which it could not stand. I would rather have a little inflation than deflation. Nevertheless, as long as we accept a small annual infla-

tion or fall in the value of money, if we agree to have a guiding light generally for salary and wage earners, we should accept a guiding light for pensioners.
The State pension can be increased and such measures as concessionary fares introduced. But people living on small incomes from investments can do nothing to recover what they are losing in terms of real value. I ask the Government to consider this because society is leaving behind a large section of the population—a section which has perhaps given our society its present standard of living.
These are the people born early this century who saw through two world wars and the difficult days between them. They have made a great contribution to the life of the nation. They showed tremendous courage in hanging on in those difficult years. Now they are in their sixties and seventies and are suffering in our affluent society to a terrible degree. This is their reward for thrift, courage and tenacity. They are being ignored in a mad scramble by every section of the community for what it can cream off in an inflationary system.
We all agree that this is a difficult situation and I hope that my right hon. and hon. Friends will divide the Committee. I hope that hon. Members opposite who feel as passionately as we do about this unfortunate section of the community who get little relief and compensation from the affluent society will come into the Lobby with us and force the Government to accept this Clause.

Mr. J. J. Mendelson: The hon. Member for Walsall, South (Sir H. d'Avigdor Goldsmid) invited the Financial Secretary to say "No" to the Clause. He provided his hon. Friend with an introductory basis for what he should say. He hoped that the Financial Secretary would say that these were desirable aims, but that the Government could not do anything about them this year. He added that, if the Financial Secretary said that, he would not be too disturbed and disappointed. I have known the hon. Member fighting much more fiercely for other causes that have more to do with concessions he thought desirable on certain occasions during debates on the Finance Bill, and he was then not so mild-mannered.
The Financial Secretary should understand that he has to address himself not only to a general argument, but to a particular case. I support, in particular, new Clause 6 which deals with the exemption from Income Tax of the pensions of certain widows and which has been explained with a wealth of detail and knowledge by my hon. Friend the Member for Westhoughton (Mr. J. T. Price) and my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes).
This is not an argument which can be met by some general reference to being in sympathy with what is being asked for. It will have to be answered by an explanation, which the Treasury is obliged to give, as to why this anomaly has not been put right. I hope that the Financial Secretary will not follow the advice of his hon. Friend the Member for Walsall, South, but will agree with the vast majority of hon. Members who have taken part in the debate that there is a first-rate case for exemption under new Clause 6, as under the others.
What is involved in new Clause 6 is something particularly to do with the Treasury and our system of taxation. Obviously, a debate of this kind is bound to be wide and without the historical background, which has been explained, the demands would not be properly comprehensive. There are many ways of dealing with some of the problems which have been reported to the Committee today and we well know that the Treasury may say that many of these things might be desirable, but come under the heading of pensions or compensation schemes to be dealt with by other Ministries.
The Financial Secretary will not get far if he confines himself to that argument, because, I repeat, although I wish to concentrate on this one Clause, that the background to this problem is even more important than the precise technical details. However, the hon. Gentleman has to address himself to these details, and the first essential of new Clause 6 is that it deals with those who have been injured in war or industry and who as a result are in receipt of a pension.
We know that in many of these cases the total income of the family while the head of the family in receipt of the pension is still alive is small, and that it is always a struggle for the family, even while the head of the family is still alive, and that many of the pensions are small and some

very small. But it is not just the general case of the difficulty which that family faces when the breadwinner has been injured in the Armed Forces or in industry, sometimes injured early in his life and career, sometimes at a time when the continuation of his career is made quite impossible for the major part of his life.
There is now a tragic anomaly in our taxation law that although the income of the family while the husband was still alive and in receipt of a pension was small, on his death the Treasury applies an altogether different principle to his widow. As long as the recipient of the pension himself is alive, the pension does not count for taxation. It is exempted for very good, sound, moral reasons.
We know that the general principle by which the Chancellor of the Exchequer puts his Budget together has to do with the general economic situation and, nowadays, is as much a lever of economic policy as for raising revenue and disbursing public money. But it has never been denied that in addition to the economic background there is a principle of equity to which generations of hon. Members have always paid the greatest possible regard.
9.30 p.m.
This principle is involved in new Clause 6. After the recipient of a pension has died, his widow in receipt of the pension to which he was entitled or, as in many cases, only a part of the original pension, now has to pay tax. This is as unreasonable a position as anybody could contemplate, and very often the reality of the situation is even worse. I have had cases in my constituency, as I am sure other hon. Members have had in theirs, which show that from an economic point of view the period following the husband's death is a particularly difficult one for the widow. Many concessions which were allied to the husband's job cease, or are so seriously reduced that they lose their value. At a time when a widow faces many difficulties in the home, and when she may have to cope with a number of problems with which she did not have to deal before, the Treasury applies a different principle to the new recipient of the pension.
Many important arguments have been put forward today in support of these new Clauses, and I fully support them,


but I think that if a case had to be made to ask the Treasury to look again at this kind of anomaly I would say that there was great force in what we are trying to do in new Clause 6. I hope that the Minister will address himself seriously to this problem, and that in spite of the encouragement in the wrong direction which he has received from the Devil's advocate in the form of the hon. Member for Walsall, North he will see the wisdom and force of our case and accept at least new Clause 6.

The Financial Secretary to the Treasury (Mr. Alan Green): We have had quite a lengthy debate on these four new Clauses. I am not in the smallest degree complaining about that, and I think that I have been fortunate enough to be able to listen to every word of the debate. In my view the debate has been very restrained throughout, and I suspect that my answer will be equally restrained because I see no reason whatever for answering the one or two party points which were made.
I think that the intervention of the right hon. Member for Llanelly (Mr. J. Griffiths) deserves a separate reply, and the first point that I must make is that all four new Clauses relate to one form or another of Income Tax relief. One is going to be able to give relief only if the recipient is in a position to pay Income Tax. Consequently, and the right hon. Gentleman may have noticed me shaking my head while he was speaking, those undiscovered folk living below the level of National Assistance rates could not benefit from any single one of the reliefs proposed in any one of these four new Clauses. I am afraid that that has to be my answer. They are really not germane to the problem on which the right hon. Gentleman's heart is so understandably set.
New Clause No. 3 is of a more truly general character than the other three new Clauses which bear on more particular and rather separate problems. New Clause No. 3 follows, and seeks to add to, what has been properly described today as a piece of Conservative reform carried out over past years in this particular area of allowances. My hon. Friend the Member for Tynemouth (Dame Irene Ward) was good enough to point this out. She has her own way

of driving Ministers to do more of what she wants, and I do not object to that either. But it is a fact that over the last several years Chancellors have done more than merely consider points of this kind; they have often acted as well. I am glad to have the chance to reinforce what my hon. Friend said about that.
Taxpayers in the over-65 band, qualifying for age exemption, receive more favourable treatment than do taxpayers under 65, as the hon. Member for Sowerby (Mr. Houghton) said. He had his way of pointing it out, and perhaps I may help the illustration by saying that if a person is below the age limit for exemption he has a personal allowance of £200 if he is single, and the effect of age exemption is, in effect, to raise that sum, for a single person over 65, to £253. There is already a differential of £53, putting it in that way, for a single person and a comparable differential for the married couple over 65. In their case the differential works out at £85 a year. The question posed by the new Clause is whether the differential in favour of the elderly is adequate in this year.
The hon. Member for Sowerby was fair enough to say—and if he does not like my paraphrase of what he said he can tell me so—

Mr. Houghton: I believe that I am right in saying that when the Chancellor last year increased the personal allowances and at the same time increased the age exemption he narrowed the disparity between the younger and the elder taxpayer and did not widen it. That was because the increase that he gave in personal allowances was higher, in proportion, than the increase in age exemption. Last year, therefore, the trend went against the old people.

Mr. Green: I think the position was held, rather than improved. The hon. Member may have a point there, but I am not sure. The point is that this differential has been built in in the past few years. Hon. Members on both sides can agree about that. The question is whether that differential should be widened in this year.
The argument in favour of that action has been persuasively put by hon. Members on both sides of the Committee tonight. Perhaps I will not please my hon. Friend the Member for Tynemouth, but


I have no other position to adopt at this Box—I think that the whole Committee will understand this—than to say that my right hon. Friend is considering the question whether the differential is wide enough in this year. I cannot and shall not anticipate his decision, but there is one point that I should like to make. I have deliberately left it to the end, because I do not wish to rest a great deal of argument on it. The Clause is technically defective, because it does not provide for consequential changes in marginal relief. If anything were to be done in the spirit of the Clause its present wording would not do. I must give the Committee that technical advice.
My right hon. Friend is considering the matter. It is more than a matter of words. He not merely has sympathy with it; it is a possible development of the system of allowances that has been built up by his predecessors and himself in recent years, and I can promise the House that his consideration of it is a genuine and real one. But I am afraid that I cannot anticipate it at this Box tonight.

Dame Irene Ward: May we have an answer for Report? I just want that assurance for the record.

Mr. Green: My right hon. Friend will consider it between now and Report. I am quite willing to have that on the record.
I come to new Clause No. 4. It is not clear on the face of the wording whether the new Clause is intended to apply solely to spinsters. It could be held to apply to married women, with their husbands still alive reaching the age of 60. I am not at all clear from the wording to whom it is intended to apply—whether to the narrower definition of spinster or not. If it is to the wider definition, I must advise the Committee that it would arouse a lot of valid criticism from those whom I might call the non-beneficiaries. If the wider definition is intended by the Opposition—and I am not clear about that—then a widower who had the misfortune to lose his wife when she was 59 would not get the benefit, whereas the man whose wife had lived to 60 would get the benefit. This is not the kind of provision which we ought to incorporate into our tax system, but in any event I do not believe that in these kinds of tax relief we ought to introduce this sort of

discrimination—and frankly this is a discriminatory proposal—in favour of women who would get five years' benefit in claiming this allowance.

Mr. G. R. Mitchison: The hon. Gentleman seems to be troubled as to the kind of woman to whom this refers. The short answer is that it refers to the same kind of woman as the kind to whom Section 13 of the Finance Act, 1957, applies. With great respect to the hon. Gentleman, I thought that that was obvious.

Mr. Green: In that case I must point out—and I can only pass on the advice which I have received—that it may well be held to apply to a married couple and not just to a single person.

Mr. Mitchison: A married couple is not a woman. It is a woman and a man.

Mr. Green: With great respect to the hon. and learned Gentleman, the greatest possible respect to him, the system of taxation and allowances in this country is such that in the case of a married couple allowances attach to them jointly. This is a difficulty which he has not resolved. If he likes to take the new Clause away and redraft it in order to resolve that difficulty, it might be easier to deal with it. Now that the defect has been pointed out, the Opposition could well do that.

Mr. James Callaghan: If wet took that trouble, which we should be happy to do, would it be worth our while?

Mr. Green: I could take refuge in the inability to anticipate my right hon. Friend's reaction to that. No, I do not think it would be worthwhile in the sense in which the hon. Member put it to me.
May I give my underlying reason? I am given a particular form of discrimination, which would be added to if the Clause applied other than to spinsters. In any event, there is this discrimination—in terms of a tax relief which might be claimed—against men and in favour of women. I am fortified in giving this answer by the Royal Commission who in paragraph 204 of its second Report expressed itself as being against such a discrimination. I must advise the Committee that my right hon. Friend is against this discrimination and is unlikely to change his; mind about it

Miss Herbison: I asked whether the age 65 had been chosen because of retirement. Whatever the Minister may take out of this discussion, he has at any rate learned that the Clause applies only to women—to spinsters and to widows. Many of them are forced out of work by retirement rules at the age of 60, and they suffer great hardship because of that. Will he take that point into account?

9.45 p.m.

Mr. Green: I follow the hon. Lady's point. It would be very difficult if one started to import into a tax law which does not already have this species of discrimination in it a discrimination between men and women based on different ages of retirement. I am not denying that women can retire earlier than men legally, but it would be impossible to deny also that, if we introduced this piece of discrimination, which is what it is, against men, the criticism from the men would be very violent indeed, and it would be justified. I am against the importation of discrimination, because I do not think that at the end of the day it does any good. One creates more anomalies than one gets rid of. Again, I must advise the Committee that my right hon. Friend is not at all enamoured of new Clause 4.
I come to new Clause 5. It is true that there are some people under 65 who, because of poor health, have to live on a small investment income. The Clause as drafted would benefit that number of people. In fact there would be very few of them. Once again, the benefit comes only if the claimant has an income above the starting point. The truth is that the major benefit here would go in very small amounts indeed over several hundred thousand people. This may be a very good reason for accepting the Clause, that, although the relief it would give would be very small in amount, it would benefit a substantial number of people.
However, I am not absolutely certain that this side-effect is appreciated. Many of those who would get relief would, as the Clause is now worded, be young people at an early stage of their careers who happened to have some investment income in addition to their earnings.

Mr. Callaghan: How many?

Mr. Green: I cannot tell the hon. Gentleman how many. I am saying that this is a somewhat capricious result of this proposal. I do not know that the proposal would be too valuable, particularly in this year. The small income relief is relevant only for people who are under 65, because the age relief for those over 65 is more generous. It has a higher income limit. Therefore, I am bound to advise the Committee that, in a year in which concessions in terms of direct taxation are, to say the least of it, thin, I would put this one pretty low down on the list of priorities. My right hon. Friend would not wish to consider it between now and and Report. It is a matter of priorities.
I come to new Clause No. 6. As I expected, this proposal has brought forth expressions of very sincere sympathy and sentiment. I do not for one moment question the sincerity with which they have been advanced from both sides of the Committee. There has been some misconception, certainly in the speech of the hon. Member for Penistone (Mr. Mendelson). The pension awarded to the disabled soldier or the man disabled by an industrial injury is very largely compensation for his personal inability to go on working.

Mr. J. Griffiths: Under the old Workmen's Compensation Act the compensation was for loss of earnings. The whole concept of the Royal Warrant for war pensions—indeed, the National Insurance (Industrial Injuries) Act was based on the same concept—was that the disablement pension, assessed on a percentage up to 100 per cent., was awarded for loss of faculty and was not affected in any way by what the man or woman could earn afterwards. It is important to make this distinction.

Mr. Green: I am not dissenting from what the right hon. Gentleman has said. Indeed, there is no conflict between us on this issue. I am pointing out that if a soldier is disabled and discharged because he is wounded and unable physically to continue his particular form of employment, or if he is handicapped for any other employment, what he is clearly getting is a form of compensation. But if he dies and his widow so to speak inherits an entitlement to income—it must be realised that this is what she is


inheriting; an entitlement to income—it becomes difficult to assess or exempt from tax the amount she receives on any basis other than that it is income. This is where one gets into great difficulty and I want to illustrate the sort of difficulty I have in mind.

Mr. Mendelson: The Financial Secretary said that as long as the husband is alive this is something that he has received. Does not the hon. Gentleman agree that it is a joint household? The fact that the husband has not been able to earn a living in the way he would otherwise have done had he not been injured is as hard a blow to the wife as to the husband and, therefore, there is no reason to alter that on purely technical grounds once the husband has died.

Mr. Green: I have the greatest sympathy with that sort of argument of sentiment.

Mr. Mendelson: It is not a question of sentiment.

Mr. Green: With respect, it is. It is understandably an argument of worthy sentiment.

Mr. J. T. Price: rose—

Mr. Green: I want to illustrate the sort of difficulty I have in mind.

Mr. J. T. Price: The Financial Secretary is making much of the technical argument that it is difficult to make this distinction in principle. If it is so difficult, how does he explain that our closest colleagues in the Commonwealth, Canada and Australia, have already done it and that among the European nations Germany, Austria and some of the other defeated countries have also accepted the case which my hon. Friends are arguing? For a British Minister to say that we cannot, with our technical knowledge, do the same would appear to indicate that something is wrong. It certainly indicates to me that the hon. Gentleman's argument is unconvincing.

Mr. Green: The hon. Member seized that opportunity to add a second part to his original speech. I do not blame him, but he might have given me credit for wishing to come to the point he raised, for I was just about to do so. The fact that other countries, whether Germany or Canada, have decided to go along with

this argument of worthy sentiment and produce this form of tax exemption does not, and certainly should not, necessarily prevent us from considering whether or not this is, in its own terms, the right thing for us to do. When someone else has done something, that is no reason for not considering whether it is the right thing for us to do.
The cost of the provisions in this new Clause would be small, if it could be confined to the particular exemptions stated. It might cost £1 million a year, though it is very difficult to estimate. But, if the new Clause were passed, what would we have to do in the following circumstances, which I trust are not too far-fetched? I put the case in order to show the type of anomalies that could be created. In a collision between a vehicle driven by a Service man and a vehicle driven by a civilian, both men are killed. Under the new Clause, the widow of the Service man would not get her pension tax free, but the civilian's widow might. That is the sort of anomaly we would run into, and there are plenty of others that would most certainly be created. What about the widow of a man who is drowned seeking to rescue a child? Is not she as deserving a case as any?
I believe that one would be driven inexorably to the argument that widows' pensions, as such, should be exempt from tax. I am quite certain that one would continue to find case after case left out under the new Clause which would be bound to demand strong sympathy as soundly and worthily based on sentiment as is the present argument. One would be driven to exempt all widows' pensions from liability to tax—[Interruption.] That is an argument on principle that might well be made. My objection to the new Clause is that it does not make that argument, but simply leads inexorably to it.
As I say, the cost in a year would be about £1 million, but that is not really the ground on which I base my argument. My case is that the new Clause would produce so many anomalies that it would inevitably lead to an irresistible demand for the relief, to be progressively widened, and thus become expensive. This is the sort of thing that, though put forward for a worthily sentimental reason, might well destroy the balance, not of this Budget but of future Budgets, and I could not advise the Committee to accept it.

Mr. Loughlin: Before the hon. Gentleman sits down, will he deal with the intervention of my hon. Friend the Member for Westhoughton (Mr. J. T. Price)? The Financial Secretary said that it did not necessarily follow that because a country in Western Europe had pursued a taxation policy similar to that proposed in this new Clause Britain should do likewise. Will he explain what might have happened had the Government led us into the Common Market?

Mr. Green: The case of Germany has been cited. I cannot tell the hon. Member whether all the other members of the Common Market have adopted the German treatment, though I do not think that they have done so. It will not have escaped the hon. Gentleman's notice that each Common Market country still has its own separate Government, and often quite a different tax code, and in all respects continues to behave as an individual country. Therefore, the hon. Gentleman's question does not arise. It was a good shot, but it missed the target.

Mr. Callaghan: The Financial Secretary's reply is typical of Treasury reasoning—lucid, clear and sterile. Having listened to everything he had to say, I think that we are driven back once again by this circular route to a very difficult position because of the Government's failure to act as they should have done in respect of the small incomes at the bottom of the Income Tax scale.
10.0 p.m.
A number of the Clauses which have been put down are devised to try to force the Chancellor to exempt more incomes at the bottom of the scale. The Chancellor and the Financial Secretary seek to prove that it would create a number of anomalies if the new Clause 6 were singled out, but the way to avoid those anomalies is to increase the exemption limit for this type of income. This is the case which I have argued year after year, and at times it seems to be partially recognised when the Government put up the exemption limit.
It would be ridiculous for us, as was said on the new Clause 3, to exempt Field Marshal Montgomery's old-age pension from Income Tax with the most deserving cases. The way to avoid the anomalies would be to put up the

exemption limits. The Financial Secretary could very well have met the case made in the new Clause 6 if only he had agreed to new Clauses which we have moved year after year in an attempt to get the exemption limits raised.
It is because the Government have refused to push up the exemption limits that my hon. Friends are compelled to put down Amendments to single out and highlight particular difficulties, and then we are met with the circular argument by being asked to look at the anomalies that we create. Therefore, the Treasury always wins. There is a substantial case for considering the new Clause 6 in relation to raising the exemption limits. There are far too many people at the bottom of the Income Tax scale who are still being taxed and who should be exempt. It is an extraordinary argument to hear advanced from the benches opposite, as we have heard it, that this might upset the future balance of the Budget.

Mr. Green: I was pointing out that these particular proposals were not going to upset the future balance of the Budget, but that if one were driven on, in the way that I suggested one would be, the future balance of the Budget would be upset.

Mr. Callaghan: I have heard the argument that Clause 3 would cost £3 million, and although the phrase was not that it would unbalance the Budget it was suggested that it was typical of the irresponsibility of the Opposition in that we were always putting these things forward without counting the cost.
The hon. Member for Rutland and Stamford (Mr. K. Lewis) said that we were putting that forward when we were asking for a reduction of the Purchase Tax. If budgeting were an exact science there would be something in this argument about unbalancing the Budget, but if anybody looks at the Financial Statement he will see that it is worse than trying to fill up the football pools. The last Statement published with the Budget showed mat last year the Chancellor collected £51 million more in revenue than he expected. He spent £112 million less than he had expected to spend and taking various other figures, the right hon. Gentleman's arithmetic


at the end of the day was out by £209 million.
When I hear the argument that we cannot afford concessions of this sort because this might upset the balance of the Budget I would point out that it is the Chancellor who upsets the balance more than anybody else. If he gets within £100 million of the right figure he thinks that he is doing very well. When we are asked to tie ourselves on the proposition whether the Chancellor has withdrawn the correct amount from the consumer this year, my answer is that it is absurd to ask that of us when the Chancellor himself does not know within £100 million or £200 million whether he has done the right thing.
I see no reason why we should commit ourselves to the reasoning by which the Chancellor feels bound. I reject the argument that, when we are talking about a number of these new Clauses, we have to demonstrate where the revenue should be raised from, when the Chancellor himself has no idea within £100 million whether his revenue or expenditure figures will be right.

Mr. Turton: The hon. Gentleman has not been here for the debate, or he would know that no one on this side of the Committee has used this argument. He is right off the point.

Mr. Callaghan: I have sat through most of the debate and it so happens that, while the right hon. Gentleman was away at dinner, his hon. Friend the Member for Rutland and Stamford made exactly that point, and it has been reproduced in other ways during the debate. Moreover, it is constantly made on a number of similar occasions. In relation to this Clause, it is quite irrelevant.
The Financial Secretary told us that the Chancellor is to reconsider new Cause 3. Is this part of the budgetary provision which has been made for an increase in pensions? Is this the way in which the Chancellor intends to do it? For the life of me, I cannot understand why the Chancellor has to wait until the Opposition put down a new Clause dealing with exemption limits for old people before he can tell the House of Commons through the mouth of the Financial Secretary, that he will consider the matter.
If ever there was a justification for a Committee stage, this is it. We have got to the position where the Chancellor, who has had all year to think about it, waits until we are half an hour or so before a vote and then says, "All right; I think there is a good point in what you say, and I will consider it". We have been putting this point year after year. What has happened to make him change his mind now?

Mr. Green: I trust that the hon. Gentleman does not wish to be too unfair. We have already agreed on both sides that this particular form and structure of exemption has been built up by Chancellors on this side of the Committee in recent years. What I said was that the Chancellor had considered, and was still considering, whether he had got the balance right in this particular year for this particular relief.

Mr. Callaghan: This gets more and more unconvincing. Why could not he do it when he presented his Budget? The process of preparing the Budget starts in October. What is the magic in the period between 14th April and today which leads him to say that, in the light of the Opposition's new Clause, he will now consider whether he has got the structure and relationship right between the exemption limits and the marginal reliefs for old people?
I am delighted that my hon. Friends' pressure has resulted in this. [HON. MEMBERS: "It is Faversham."] I do now know whether it is Faversham or not. But let us be clear, and let the country be clear, that it has been from this side of the Committee, with certain honourable exceptions, that the pressure has come. I say to the hon. Lady the Member for Tynemouth (Dame Irene Ward) that to her vehemence we have added a logical and rational background of fact from which the Chancellor has been quite unable to escape. I include the hon. Lady in the roll of honour in this matter. I only wish that she had signed the new Clause.
It is important to get it clear that from this side of the Committee we have exposed the logical fallacy of the Chancellor's position on these allowances by prosecuting the matter year after year.

Dame Irene Ward: I am very grateful to the hon. Gentleman for the nice things that he has said. The point is that we have got the money. He has not provided it, or said how he would.

Mr. Callaghan: I am very glad to hear that the hon. Lady has the money.

Dame Irene Ward: I said ''we'' —on this side of the Committee.

Mr. Callaghan: I well remember the occasion when the hon. Lady sat on the Government Front Bench one evening. She is still not a member of the Government, although she was there on that occasion.
I can only repeat what I said before. When the Budget is so much out of balance, as it is at this moment, and the figures are completely irrelevant in relation to the sort of relief we are talk-

ing about, it is nonsensical to argue as the Government have done.

I have no doubt that my hon. Friends ought to prosecute this matter now to a Division. We have beaten the Government in argument. We have forced them to concede that they will reconsider this matter before the Report stage. We shall certainly put the matter down again ourselves, though I hope that we shall have some concession from the Government by that time. My hon. Friends can conclude that, as a result of their speeches, their time has not been wasted. I believe that there will be profit and benefit out of this for a great many old people and my hon. Friends can conclude that they have done a good day's work.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 168, Noes 198.

Division No. 102.]
AYES
[10.10 p.m.


Ainslay, William
Fletcher, Eric
McKay, John (Wallsend)


Albu, Austen
Foley, Maurice
MacKenzie, J. G.


Allaun, Frank (Salford, E.)
Foot, Dingle (Ipswich)
McLeavy, Frank


Allen, Scholefield (Crewe)
Foot, Michael (Ebbw Vale)
MacPherson, Malcolm


Awbery, Stan (Bristol, Central)
Fraser, Thomas (Hamilton)
Mallalieu, E. L. (Brigg)


Bacon, Miss Alice
Galpern, Sir Myer
Manuel, Archie


Barnett, Guy
George, LadyMeganLroyd (Crmrthn)
Mapp, Charles


Baxter, William (Stirlingshire, W.)
Ginsburg, David
Mason, Roy


Beaney, Alan
Gourlay, Harry
Mellish, R. J.


Bellenger, Rt. Hon. F. J.
Griffiths, David (Rother Valley)
Mendelson, J. J.


Bence, Cyril
Griffiths, Rt. Hon. James (Lianeliy)
Millan, Bruce


Blackburn, F.
Hamilton, William (West Fife)
Milne, Edward


Blyton, William
Hannan, William
Mitchlson, G. R.


Bottomley, Rt. Hon. A. G.
Harper, Joseph
Monslow, Walter


Bowden, Rt. Hn. H. W. (Lelcs, S. W.)
Hayman, F. H.
Morris, John (Aberavon)


Bowen, Roderic (Cardigan)
Henderson, Rt. Hn. Artbur (RwlyRegis)
Neat, Harold


Boyden, James
Herbison, Miss Margaret
Noel-Baker, Francis (Swindon)


Braddock, Mrs. E. M.
Hill, J. (Midlothian)
Oliver, G. H.


Bray, Dr. Jeremy
Hilton, A. V.
O'Malley, B. K.


Broughton, Dr. A. D. D.
Holman, Percy
Oram, A. E.


Butler, Herbert (Hackney, C.)
Holt, Arthur
Oswald, Thomas


Boston, T.
Hooson, H. E.
Owen, Will


Callaghan, James
Houghton, Douglas
Padley, W. E.


Carmichael, Nell
Howie, W.
Panne, Charles (Leeds, W.)


Cliffe, Michael
Hughes, Cledwyn (Anglesey)
Pearson, Arthur (Pontypridd)


Coillck, Percy
Hughes, Hector (Aberdeen, N.)
PentJand, Norman


Corbet, Mrs. Freda
Hunter, A. E.
Prentice, R. E.


Craddock, George (Bradford, S.)
Hynd, H. (Accrington)
Price, J. T. (Westhoughton)


Crossman, R. H. S.
Hynd, John (Attercllffe)
Probert, Arthur


Cullen, Mrs. Alice
Irvine, A. J. (Edge Hill)
Pursey, Cmdr. Harry


Dalyeil, Tarn
Jenkins, Roy (Stechford)
Rankin, John


Darling, George
Jones, Dan (Burnley)
Redhead, E. C.


Davies, G. Elfed (Rhondda, E.)
Jones, Elwyn (West Ham. S.)
Rees, Merlyn (Leeds, S.)


Davies, Harold (Leek)
Jones, J. Idwal (Wrexham)
Rhodes, H.


Davies, Ifor (Gower)
Jones, T. W. (Merioneth)
Roberts, Albert (Normanton)


Deer, George
Kenyon, Clifford
Roberts, Goronwy (Caernarvon)


Dempsey, James
King, Dr. Horace
Robertson, John (Paisley)


Diamond, John
Lawson, George
Rodgers, W. T. (Stockton)


Dodds, Norman
Ledger, Ron
Rogers, G. H. R. (Kensington, N.)


Doig, Peter
Lee, Miss Jennie (Cannock)
Ross, William


Donnelly, Desmond
Lewis, Arthur (West Ham, N.)
Short, Edward


Duffy, A. E. p. (Colne Valley)
Lougriun, Charles
Silverman, Julius (Aston)


Edwards, Rt. Hon. Nese (Caerphilly)
Lubbock, Eric
Skeffington, Arthur


Edwards, Robert (Bilston)
Mabon, Dr. J. Dickson
Slater, Mrs. Harriet (Stoke, N.)


Edwards, Walter (Stepney)
McBride, N.
Slater, Joseph (Sedgefield)


Evans, Albert
MacColl, James
Small, William


Fernyhough, E.
MaoDermot, Niall
Smith, Ellis (Stoke, S.)


Fitch, Alan
McInnes, James
Snow, Julian




Spriggs, Leslie
Thornton, Ernest
Willis, E. C. (Edinburgh, E.)


Stewart, Michael (Fulham)
Thorpe, Jeremy
Winterbottom, R. E.


Stones, William
Wainwright, Edwin
Woodburn, Rt. Hon. A.


Swain, Thomas
Watkins, Tudor
Woof, Robert


Swingler, Stephen
Weitzman, David
Wyatt, Woodrow


Symonds, J. B.
Whitlock, William
Yates, Victor (Ladywood)


Taverne, D.
Wiltkins, W. A.



Thomas, lorwerth (Rhondda, W.)
Willey, Frederick
TELLERS FOR THE AYES:


Thomson, G, M. (Dundee, E.)
Williams, W. T. (Warrington)
Mr. Charles A. Howell and




Mr. Grey.




NOES


Agnew, Sir Peter
Gurden, Harold
Oakshott, Sir Hendrie


Atkins, Humphrey
Hamilton, Michael (Wellingborough)
Orr, Capt. L. P. S.


Awdry, Daniel (Chippenham)
Harris, Reader (Heston)
Osborn, John (Hallam)


Barlow, Sir John
Harrison, Brian (Maldon)
Osborne, Sir Cyril (Louth)


Batsford, Brian
Harrison, Col. Sir Harwood (Eye)
Page, Graham (Crosby)


Berkeley, Humphry
Harvey, John (Walthamstow, E.)
Partridge, E.


Bidgood, John C.
Hendry, Forbes
Pearson, Frank (Clitheroe)


Biffen, John
Hiley, Joseph
Percival, Ian


Biggs-Davison, John
Hill, Mrs. Eveline (Wythenshawe)
Pickthorn, Sir Kenneth


Bingham, R. M.
Hill, J. E. B. (S. Norfolk)
Pounder, Rafton


Birch, Rt. Hon. Nigel
Hobson, Rt. Hon. Sir John
Powell, Rt. Hon. J. Enoch


Bishop, Sir Patrick
Hogg, Rt. Hon. Quintin
Proudfoot, Wilfred


Black, Sir Cyril
Holland, Philip
Quennell, Miss J. M.


Bossom, Hon. Clive
Hollingworth, John
Ramsden, at. Hon. James


Bourne-Arton, A.
Hopkins, Alan
Rawlinson, Rt. Hon. Sir Peter


Box, Donald
Hornsby-Smith, Rt. Hon. Dame P.
Redmayne, Rt. Hon. Martin


Boyd-Carpenter, Rt. Hon. John
Howard, John (Southampton, Test)
Rees, Hugh (Swansea, W.)


Boyle, Rt. Hon. Sir Edward
Hughes Hallest, Vice-Admiral John
Renton, Ht. Hon. David


Brewis, John
Hughes-Young, Michael
Ridsdale, Julian


Buck, Antony
Hulbert, Sir Norman
Roots, William


Bullard, Denys
Hurd, Sir Anthony
Ropner, Col. Sir Leonard


Bullus, Wing Commander Eric
Hutchison, Michael Clark
Royle, Anthony (Richmond, Surrey)


Campbell, Gordon
Iremonger, T. L.
Scott-Hopkins, James


Carr, Compton (Barons Court)
James, David
Shaw, M.


Carr, Rt. Hon. Robert (Mitcham)
Jennings, J. C.
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Chataway, Christopher
Johnson, Eric (Blackley)
Smyth, Rt. Hon. Brig. Sir John


Chichester-Clark, R.
Johnson Smith, Geoffrey
Spearman, Sir Alexander


Clark, Henry (Antrim, N.)
Jones, Rt. Hn. Aubrey (Hall Green)
Stairnton, Keith


Clark, William (Nottingham, S.)
Kerens, Cdr. J. S.
Stanley, Hon Richard


Clarke, Brig. Terence (Portsmth, W.)
Kerby, Capt. Henry
Steward, Harold (Stockport, S.)


Cooke, Robert
Kerr, Sir Hamilton
Stoddart-Scott, Col. Sir Malcolm


Cooper, A. E.
Kirk, Peter
Studhoime, Sir Henry


Corfield, F. V.
Kitson, Timothy
Summers, Sir Spencer


Costain, A. P.
Leavey, J. A.
Tapsell, Peter


Coulson, Michael
Legge-Bourke, Sir Harry
Taylor, Sir Charles (Eastbourne)



Lewis, Kenneth (Rutland)



Craddock, Sir Beresford (Spelthorne)
Lilley, F. J. P.
Taylor, Edwin (Bolton, E.)


Critchley, Julian
Linstead, Sir Hugh
Taylor, Frank (M'ch'st'r, Moss Side)


Curran, Charles
Litchfield, Capt. John
Taylor, Sir William (Bradford, N.)


Currie, G. B. H.
Longden, Gilbert
Teeling, Sir William


Dalkeith, Earl of
Loveys, Walter H.
Temple, John M.


Dance, James
Lucas-Tooth, Sir Hugh
Thatcher, Mrs. Margaret


d'Avigdor-Coldsmid, Sir Henry
McAdden, Sir Stephen
Thomas, Sir Leslie (Canterbury)


Deedes, Rt. Hon. w. F.
MacArthur, Ian
Thompson, Sir Richard (Croydon, S.)


Digby, Simon Wingfieid
Maclay, Rt. Hon. John
Touche, Rt. Hon. Sir Gordon


Doughty, Charles
Maclean, Sir Fitzroy (Bute&amp;N. AyTs)
Turner, Colim


du Cann, Edward
McMaster, Stanley R.
Turton, Rt. Hon. R. H.


Duncan, Sir James
Macmillan, Maurice (Halifax)
Tweedsmuir, Lady


Eden, Sir John
Maddan, Martin
van Straubenzee, W. R.


Elliot., Capt. Walter (Carshalton)
Maginnis, John E.
Vane, W. M. F,


Elliott, R. W. (Newc' tle-upon- Tyne, N.)
Markham, Major Sir Frank
Vaughan-Morgan, Rt. Hon. Sir John


Errington, Sir Eric
Marten, Neil
Walder, David


Farr, John
Mathew, Robert (Honiton)
Walker, Peter


Finlay, Graeme
Matthews, Gordon (Meriden)
Webster, David


Fletcher-Cooke, Charles
Maude, Angus (Stratford-on-Avon)
Wells, John (Maidstone)


Fraser, Ian (Plymouth, Sutton)
Maudling, Rt. Hon. Reginald
Williams, Dudley (Exeter)


Gardner, Edward
Mawby, Ray
Williams, Paul (Sunderland, S.)


Gibson-Watt, David
Maxwell-Hystop, R. J.
Wills, Sir Gerald (Bridgwater)


Giles, Rear-Admiral Morgan
Maydon, Lt.-Cmdr. S. L. C.
Wilson, Geoffrey (Truro)


Glover, Sir Douglas
Mills, Stratton
Wise, A. R.


Glyn, Dr. Alan (Clapham)
Mlecampbell, Norman
Wolrige-Gordon, Patrick


Goodhew, Victor
Montgomery, Fergus
Woodhouse, C. M


Gough, Frederick
More, Jasper (Ludlow)
Woollam, John


Gower, Raymond
Morrison, Charles (Devizes)
Yates, William (The Wrekin)


Grant-Ferris, R.
Morrison, John



Green, Alan
Neave, Alrey
TELLERS FOR THE NOES:


Griffiths, Eldon (Bury St. Edmunds)
Noble, Rt. Hon. Michael
Mr. McLaren and Mr. Pym.


Grosvenor, Lord Robert
Nugent, Rt. Hon. Sir Richard

New Clause 7.—(RELIEF FOR TOTALLY DISABLED PERSONS.)

(1) Subsections (1), (2) and (3) of section 9 of the Finance Act 1962 (Relief for blind persons), shall apply to a claimant who proves that he or his wife was a totally disabled person or that both of them were totally disabled persons as they apply respectively to a claimant who proves that he or his wife was a registered blind person or that both of them were registered blind persons.

(2)(a) In the said subsection as so applied "tax free disability payment" means a periodical payment receivable by a person on account of his disability and not falling to be treated as income for the purposes of income tax;

(b) in this section "totally disabled person" means a person in receipt of a war disablement pension or an industrial injury pension granted by the Ministry of Pensions and National Insurance and determined by reference to one hundred per cent. disablement; or a person who, though not in receipt of such a pension as aforesaid, nevertheless is disabled in manner and degree equivalent to one hundred per cent. disablement.

(3) In subsection (1) of section 14 of the Finance Act 1957 (under which, as amended by the Finance Act 1960 and the Finance Act 1962, certain reliefs specified in paragraphs (a) to (e) thereof by reference to the enactment conferring them are allowable for purposes of surtax), at the end of paragraph (e) there shall be inserted the following:—
and (f) subsection (1) of section (Relief for totally disabled persons) of the Finance Act 1964".

(4) The Income Tax Acts, and in particular Part VIII of the Income Tax Act 1952 shall have effect as if subsections (1) and (2) of this section were contained in the said Part VIII between subsections (1) to (4) of section 9 of the Finance Act 1962 (which subsections were inserted by subsection (6) of the said section 9 between sections 218 and 219 of the said Income Tax Act 1952) and the said section 219—[Mr. Millan.]

Brought up, and read the First time.

Mr. Millan: I beg to move, That the Clause be read a Second time.

The Chairman: It will be possible to discuss at the same time New Clause No. 8, "Extension of relief under Finance Act, 1960, s. 17."

Mr. Millan: The purpose of new Clause No. 7 is to introduce an Income Tax allowance for 100 per cent. disabled persons of a kind similar to that which was granted under Section 9 of the Finance Act, 1962, for blind persons.
Under the 1962 Act there is an allowance where there is one blind person in the family, either the married man or his wife, and it is also payable to a

single person. It is an Income Tax allowance of £100. But there is a deduction from it of seven-ninths of any tax-free disability payment. Therefore, when there are tax-free disability payments, such as war pensions, the allowance for blind persons will in some cases be very small, and the blind person might not come under the 1962 Act at all. Where there are two blind persons in a family, a married man and his wife, there is an Income Tax allowance of £200, but, again, seven-ninths of any tax-free disability payments are deducted from it. Therefore, in many cases the allowance will either be very small or be completely wiped out.
There is a further provision in the 1962 Act which would apply if the new Clause were accepted, and that is that a blind person claiming the blind person's allowance is not able also to claim for the services of a daughter whom he might have to have living with him to look after him. If the daughter's allowance of £40 a year is claimed, the blind person's allowance is not allowed.
In short, the allowance granted to blind persons in 1962 is a very minor one. It is rather misleading to look upon it as an allowance of £100. That would be quite a major allowance in comparison with the dependent relative's and housekeeper's allowance and the rest. But in practice in many cases the allowance will be very much smaller than £100. In the case of people blinded through war service to whom war disability pensions are being paid, the allowance will not normally be granted at all, because the tax-free disability payment of war pension, once deducted from the allowance, will wipe the allowance out.
Even the very modest allowance which we got for blind persons in the 1962 Act came only after a considerable amount of pressure on the Government from both sides of the House over many years. The business of trying to persuade the Government to give additional relief to disabled persons comes up regularly each year with successive Finance Bills. Although the amounts involved are small, it was a major victory of principle when in 1962 we were able to introduce for the first time this kind of relief for a certain class of disabled person—the blind.
The new Clause would seek to extend that relief to totally disabled persons of all kinds, not just the blind. The arguments for the extension are exactly the same as those for introducing the allowance for blind persons in the first place. The basic argument is that disabled persons, for one reason or another, have additional living expenditure. They have not only all the disabilities and disadvantages of their loss of faculties but very often are placed at considerable financial disadvantage as well. I remember that, in a speech during the passage of last year's Finance Act, I drew attention to the case of a constituent of mine. She is a young woman suffering from polio. She works for her living but her disability requires her to have a vehicle to get to and from work. Yet her travelling expenses are not allowed for Income Tax purposes.
This is the kind of thing to which a disabled person is subjected in additional expenditure. All of us can recount personal cases in our own constituencies in which disabled persons are put to considerable extra expenses particularly if they are attempting to earn a living.
The purpose of this Clause is to recognise the additional expense to which the gravely disabled are put by giving them additional tax relief. The Royal Commission on Taxation which reported in 1954 accepted that the principle of giving additional relief to the gravely disabled was a good one, but it took from 1954 to 1962 to get even the modest relief for blind persons in the Finance Act, 1962.
Quite apart from the principle involved, there is also the question of practicality. This Clause repeats, with the necessary modifications, the provisions of the 1962 Act with regard to blind persons. I shall, therefore, be surprised if the Economic Secretary says that the provisions of this Clause are not practical. I think it is eminently practical. As far as I know, there has been no difficulty over the provisions for blind persons and I would not think that there would be any difficulty in this case.
The expression "totally disabled person "is defined in subsection (2, b) of the Clause and again I think that, with this definition, there would be no great difficulty in identifying those who should

get the benefit. Indeed, it would be much easier to apply a relief of this sort than to apply reliefs for housekeeper allowances and dependent relative allowances where the relationship between two people is involved. In this case, only the claimant himself, or the claimant's wife, would be involved and there would be no difficulty in identifying those who should get relief.
As I have already said, the relief for blind persons which this seeks to repeat is really very minor when one takes into account all the qualifications, and I imagine that that relief has cost the Treasury virtually nothing. I do not think that this Clause would cost very much, but I should be glad if the hon. Gentleman gave the Government's calculation.
A similar Clause, though not in exactly these terms, was moved during the passage of the Finance, Act, 1963. One of the arguments of the Government then was that, if relief were given to the 100 per cent. disabled, this would be unfair to those who were perhaps only 90 per cent. disabled. That is the kind of legalistic argument that is very easy for the Government to produce. I should be delighted, if they were willing to extend this principle by giving relief to the 90 per cent. disabled and, for that matter, to the 50 and 60 per cent. disabled.
Even if the Government would not do that, it is a bad argument to say that we must not look after the 100 per cent. disabled because it might involve, by implication, some unfairness to those who are less disabled. I am quite sure that if the will to make this kind of adjustment were there, there would be no difficulty at all in drafting a suitable Clause.
10.30 p.m.
Another argument which I anticipate the Economic Secretary will use is that the right way to look after the totally disabled as well as the blind and all the rest is by means of social security benefits. Of course, that argument could equally apply to the blind, and yet we have already made special provision for the blind, and, for that matter, it could also apply to things like children's allowances, because, after all, we have family allowances for children, and if one uses this argument one could in fact abolish children's allowances for Income


Tax on the ground that social security provides family allowances. So this is not really an argument which can be applied in principle. It is not a simple argument which can be applied right the way through the system of allowances, because if it were all sorts of allowances would be eliminated. It is not a particularly good argument and I hope that the Economic Secretary will not rest his case tonight simply on a repetition of it.
As I said before, this proposal or similar proposals have been put forward year after year in debates on Finance Bills. In 1962 we did make slight progress with regard to blind persons. We have waited now for two years, and this seems an appropriate opportunity for making this further extension of relief of the totally disabled. That is new Clause No. 7.
In new Clause No. 8 one is really dealing with a similar kind of situation but in rather different circumstances. The purpose of new Clause No. 8 is to make a further improvement in the allowances which are at present given for housekeepers. This is a rather complicated branch of the Income Tax law with regard to reliefs. I hope that the description I am just going to give of the present position is an accurate one. In new Clause No. 8 we are concerned with the married man whose wife is totally incapacitated either because of physical or mental infirmity.
A married man with an incapacitated wife at the minute in certain circumstances is able to get a housekeeper allowance of £75. Before he is able to get that housekeeper allowance he has to meet two conditions. First of all, he has to have a child for whom he is receiving child allowance; secondly, he must have a female either resident with him or employed by him to look after the child. That is for the £75 allowance, which was covered by the 1952 Act. There was a special allowance introduced for a married man with an incapacitated wife. By Section 17 of the 1960 Act mentioned in the new Clause a special allowance of £40 is granted to the married man with an incapacitated wife on condition that he has a child for whom he is receiving child allowance but without necessarily having to meet the condition that he employs a female

person either resident or not resident to look after the child. So that £40 allowance is only to meet the condition of there being a child in the family.
The intention of this new Clause is to provide that a married man with an incapacitated wife would have the conditional personal allowance of £40 even if there were no children in the family and without regard to whether he met the normal provisions with regard to allowance for housekeepers. The argument is in principle the same kind of argument as the argument about disabled persons. However one lays down conditions in the law about this, there are bound to be additional expenses of one sort or another for a man with a totally incapacitated wife.
It is impossible for a man to run a household with a completely incapacitated wife without incurring additional expenditure in one way or another. In certain circumstances, if there are children in the family, or if a housekeeper is employed on a residential basis, a housekeeper allowance is granted, but there is still a fairly numerous category of married men with incapacitated wives who do not meet the present requirements for a housekeeper allowance, and it is to meet the circumstances of these individuals that we have suggested this new Clause with this modest allowance of £40.
There will be no difficulty about identifyng the individuals who would get the benefit of this new Clause. It would be much easier to identify them than to decide whether an individual should receive the housekeeper allowance, because one would be concerned only with determining whether the man had an incapacitated wife. Once that had been determined and no houeskeeper allowance was being paid, this allowance of £40 would be available to that married man. It would not seem to be difficult to operate the Clause in practice and it would not seem to be very costly for the Government to operate it. What cost there would be is already provided for in the various provisions for housekeeper allowances, and the comparatively small number of people who would be involved in this new Clause would not be likely to cost the Treasury very much.
Since real hardship can be involved in cases of this sort, I hope that the Government will be willing to look favourably on this as well as on the other new Clause. Once the principle has been accepted, as it has been accepted in the precedent of 1962—that when there is incapacity or disablement in the family, the Income Tax law should make special provision for additional allowances—we ought then to be concerned with seeing that that principle is extended in as humane a way as possible. The two new Clauses taken together would represent a considerable step forward.

Dr. King: I support the first of the new Clauses, that relating to 100 per cent. disablement, which my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) moved in what I am sure the whole Committee would agree to be an excellent speech. I do not propose to repeat the rather complicated formulae which he gave from the Income Tax Act, 1962, relating to blind persons, except to say that in that provision we were giving tax relief to the blind man, to the married couple one of whom was blind and to the married couple both of whom were blind, and that we did not just give a tax relief of £100, but a proportion of the tax-free income received because of the disability of blindness, doubling the £100 in the case where there were two blind persons in the family, so that the relief went most to those needing it most, doubling up where it needed to be doubled up.
This may have been only a minor concession, but it was very valuable, as those of us who know blind people are aware. What we are seeking to do is to extend the concessions which the Government gave two years ago to blind people to 100 per cent. disabled persons.
I should like to try to give the Committee a picture of what we mean by 100 per cent. disabled; what we mean by total disablement. The Ministry of Pensions and National Insurance War Pensions Book, an excellent handbook, lists those physical features which entitle a war pensioner to be regarded as 100 per cent. disabled. If he has lost both hands, or if his arms have been amputated at higher sites, or if he has a double amputation through the thigh, or if he has an amputation through one

thigh and has lost the other foot, or if he has a double amputation below the thigh to 5 ins. below the knee, or if he has a double amputation through the leg lower than 5 ins. below the knee, or if he has an amputation of one leg lower than 5 ins. below the knee and has lost the other foot—incidentally, to lose two feet is not regarded as a 100 per cent. disablement—or if he has lost a hand and a foot, or if he is blind, or if he is absolutely deaf, or if he has suffered very severe facial disfigurement, he is regarded as 100 per cent. disabled.
Side by side with those almost anatomical estimates of 100 per cent. disability, there are comparable medical assessments of 100 per cent. disability, but I mention those to show how terrible the disability must be before it is regarded as 100 per cent., and we seek to tie the relief that we provide in our new Clause to the scientific estimates made by the Ministry of Pensions and National Insurance and by the Ministry of Health of 100 per cent. disability.
Such disability is clearly determined. It is almost utter disablement. I know that much has been achieved in this field by modern science. I think of one disabled ex-Service man who came to see me last week. He has one real leg, but as he walked across the Lobby to meet me nobody would have guessed that he had one artificial leg. But in spite of what modern science can do for the man who has lost an arm or a leg, it can do very little for the man who is 100 per cent. disabled. Such men find it very difficult to live anything like a real life, and all of us in this Committee admire the extraordinary courage that they show.
It is almost impertinent for an able-bodied man to compare disability and to say that one 100 per cent. disability is as grieve us as another one. The blind are at least mobile. They have their feet and hands, The limbless have the blessing of sight. It would be a very bold man who would dare to say that one of the groups is more handicapped than the others, and war pensions treat them all the same way—the blind compared with the totally maimed.
Since 1962 we have recognised the disability of blindness for tax purposes. We have recognised the sheer inability


to live a full life, and the necessary dependence on others. We have recognised that blind people often have to buy what others can provide for themselves. We have recognised that blind people need to buy supplemental comforts, and also the fact that what are luxuries to most people are necessities to the blind. All this means—and the Treasury has conceded this—that the same income does not go as far for a blind person as it does for an able man. I suggest to the Committee and to the Chancellor that the argument which applies to the blind applies to the 100 per cent. disabled people in the categories which I have mentioned.
10.45 p.m.
I understand that the cost is almost negligible. The Disabled Drivers' Association puts it at £3 million, at the most. Perhaps the hon. Gentleman can confirm that that is the figure, or can give the Committee a more accurate estimate. The virtue of the relief given under the 1962 Act is that it goes to people who need it most, according to the formula, and that will be the case with the Clause. The Treasury has rightly always objected to the vagueness of a concession, but the group of people for whom we are pleading is easily identifiable. That is why the new Clause provides that the concession should be given according to the formula specified by the Ministry. Up to 1962 the Treasury always argued that we should not seek to help personal hardship cases in this way, and that the real way to deal with them was by the Welfare State, and by social security. But that principle has been breached in the case of the blind, and I cannot see any reason why the argument that we have applied to the bound should not equally be applied to other forms of 100 per cent. disability.
I can understand the Treasury's carefully examining any new proposal, watching for the implications and dangers. I suggest however, that since last year it has had a chance to look right round this one. This is a clearly-defined category, which can be absolutely limited. I suggest that the benefits that the House generously gave to the 100 per cent. disabled blind folk two years ago might now be given to all other people who are 100 per cent. disabled.

The Economic Secretary to the Treasury (Mr. Maurice Macmillan): We would all accept what the hon. Member for Southampton, Itchen (Dr. King) said about disablement, its effect on people's lives, and the total lack of right of those of us who are in no way disabled to attempt to assess, in terms of convenience, difficult and, still less, money, what it means to people's lives. I hope that the Committee will also accept that in the arguments that I put forward there will be no taint of Treasury meanness, because, as the hon. Members who have spoken have both pointed out, the cost, although difficult to be precise about, is so small as really not to come into the argument at all. The initial cost of new Clause No. 7 is under £1 million. Cost will, therefore, be no part of my argument tonight.
The hon. Member for Glasgow, Craig-ton (Mr. Millan) in talking about new Clause No. 8, put forward the argument that we should abandon the principle that this allowance depends upon a child resident with the taxpayer—that is to say, what is now called the housekeeper allowance, which, to some extent, owing to this qualification, could be more accurately described as a child minder's allowance, would be turned into a simple extra disability allowance for the wife. I hope that he will, therefore, accept that the arguments that I am about to develop will extend to that disability allowance under new Clause No. 8. This will save repetition, and will not cloud the issue in any way.
The hon. Member for Itchen said that new Clause No. 7, as drafted, provided that this allowance would go to those who needed it most. This is what I fear, in effect, it does not do. I must apologise to the hon. Member for Craigton for repeating the arguments used previously on this subject from this Box. If I am answering the same argument as that put forward in previous years, it is difficult not to give the same answer. No new point has been raised and the hon. Member cannot, therefore, expect me, in rejecting the Clause, to offer any new reply.
The reason I say that the Clause does not give relief to those who need it most is that it helps only the taxpayer and not those who are not within the


Income Tax code. This applies to any tax concession, and it is part of the reason why we feel that it is better to help the disabled through direct allowances. The hon. Member for Craigton said that I would use that argument, and I do use it. It is better and fairer to help these people through direct allowances given through the social services.
I cannot accept that equity between taxpayers is a legalistic argument. It is not appropriate to make a comparison with family allowances and children allowances, since family allowances are subject to Income Tax and the allowances which would disqualify from receiving benefit under the Clause are tax free. The hon. Member quoted the Royal Commission, but the Royal Commission said that allowances should not be given in addition to tax-free disability benefits and that a person should have the right to choose between receiving benefits which are not subject to tax and receiving the proposed tax allowances in respect of disablement—proposed, that is, by the Royal Commission.
One effect of this limitation would be that war disabled and others receiving industrial injury benefits would not qualify for any tax relief since their existing tax-free benefits are more valuable to them than the tax allowance. Those who are qualified by reference to their war disability or to industrial injury would be better off under the existing arrangements than they would with the tax-free allowance envisaged under the terms of the Radcliffe Commission.

Mr. Millan: It is not a question of being better off under the existing arrangements. It is only a question that in certain circumstances they would not get the additional grant from the new Clause whereas many other people would. The Clause precisely follows the Royal Commission recommendation, as did the 1962 relief.

Mrs. Slater: Is it not a fact that the disabled person does not get as much supplementary benefit as does a blind person? The argument which the Minister is advancing does not stand up.

Mr. Macmillan: I was arguing rather narrowly on the point of the Royal Commission and the terms in which it

envisaged giving this relief. I was pointing out that certain persons would not qualify for this relief because of the tax-free benefits which they were already receiving.
I hope that the Committee agrees that a tax relief is not a satisfactory method from the standpoint of seeing that the relief goes to those who need it most. The main benefit would normally go to those with higher incomes. I do not attach great weight to the administrative argument because it is not the sort of argument that should receive much consideration when talking about the disabled, but there is no doubt that it would require substantial additions to the administrative machine.
The argument put forward, apart from that on grounds of humanity, is that the disabled people referred to necessarily spend more money; but the concession is attached not to the degree of extra expenditure with which any individual may be involved but to the disability itself. I agree that anyone with a 100 per cent. disability has a great deal harder life and spends much more than anyone who is not, or who is partially disabled. But there is the whole question of illness. There are sufferers from some forms of sickness, physical and mental, who are equally totally incapacitated and must face the extra burden falling on themselves or their families. Their disability is as great and it is hard to see how one would get over that difficulty.
Some forms of chronic sickness or disability might not amount to a full disablement but might impose as much financial cost on the sufferer as a disablement due to a wholly different cause. Therefore, in treating the problem of disability, the right approach is not through a fiscal system but through the direct social service benefits and pensions. To try to do it through a fiscal system would, in the end, create more anomo-lies and unfairness between one citizen and another.
Part of the argument of hon. Members opposite is that this is precisely what the 1962 concession has done. Whereas there may be anomalies in this situation, I suggest that the state of being totally blind is one which is at least readily identifiable and is different in kind from disabilities from illness or


incapacity and the extra payments due to illness, chronic sickness, mental illness and the sort of disability referred to in the Clause.
I am, therefore, not arguing that the Government could not afford it or that this is contrary to our economic policy. It is a great human problem and we believe that the social services and pensions are the best way of tackling the problem. The Government are aware that there are anomalies and my right hon. Friend the Minister of Pensions and National Insurance has these maters very much in mind On the grounds that the method is an incorrect and not altogether fair way of settling the problem, I urge the Committee to reject the new Clause

Several Hon. Members: rose—

The Chairman: Mr. Mitchison.

Mr. William Yates: On a point of order. I, too, rose to speak.

The Chairman: Is the hon. Member raising a point of order? I would remind the Committee that the debate does not necessarily close with the next speaker. Three hon. Members rose and I called the hon. and learned Member for Kettering (Mr. Mitchison).

Mr. Mitchison: I think it would be convenient if I commented now on the Economic Secretary's reply, and I have no doubt that some of my hon. Friends will have something to add.
I listened to what I thought was a most unsatisfactory answer from the Minister. We must remember that when replying to the last proposed new Clause the Financial Secretary urged us not to make a concession of any sort because it would lead to further concessions being made. That is what happened about the blind. This simply follows up what happened in that case, and follows, in that respect, the recommendations of the Radcliffe Commission.
11.0 p.m.
The point of tax-free benefits already accruing to people, the point about dealing with it by way of direct payments in respect of Income Tax concessions—all those, and other points that the Economic Secretary has made, apply just as much to the blind as they do

to the totally disabled whom we are now considering. Surely, once a concession has been made in respect of the blind—and, I think, made on an experimental basis to see how it worked—there can be no logical objection to carrying it on for the disabled. All these points are exactly the same in the two cases.
It is true that the Financial Secretary, taking a broad view of these matters, explained to us that logic in this country was different from that in Germany or Canada, but I should have thought that here, whatever the nation, there could be no distinction in the two types of case we are considering. My two hon. Friends have made perfectly clear what the new Clauses are about. Is it really suggested by the Government that there is the least difficulty in identifying the people who get 100 per cent. pension? I should have thought that there was none whatever. In that case, the whole matter is concluded by the pension.
I was glad to hear from the hon. Gentleman that he did not wish to put forward the argument—indeed, I gathered that he would think it an unworthy argument—that there was such administrative difficulty in extending the concession to people under like disability as would preclude it. It must be accepted in the one case that the people are just as easy to identify as the blind, and, in the other case, the Government themselves do not wish to rely on any administrative difficulty.
In those circumstances, what is the point in refusing to make the concession? It is said that this would be unfair on the 90 per cent. or the 50 per cent. disablement pensioners, but there are various degrees of blindness. It may be that there should be some kind of extension, and there may be difficulties, and it may be that in this case it is better to have a direct pension only, but we are here concerned with one simple point. What possible ground is there for refusing to 100 per cent. disabled people what has already been accorded by way of tax relief to 100 per cent. blind people? There is no other point. I listened to the whole of the hon. Gentleman's speech and that is all there was in it, or not in it, according to the view one takes.
I agree that the other new Clause changes the nature of the relief. The relief in the other group of Sections of the 1952 Act associated with this one means that we cannot have benefit under one of those and under this new Clause, but they all depend on children. But there is a real, separate case for dealing with the disabled wife in this way. In both cases very little expenditure is involved. In one case the Government expressed their sympathy with the disabled people; they must surely extend the same sympathy to the case of the disabled wife. I can see no possible reason in logic or reason why, with the blind concession being as it is, and the plight of the disabled wife being obvious to everyone, this new Clause cannot be accepted. I hope that at the end of the debate we shall be told that the Government recognise that in this case they must make this small concession to cases which should surely have the sympathy of every hon. Member.

Mr. W. Yates: When I rose a few minutes ago, I wished only to ask the Minister whether he desires that every person disabled in this way who can earn a living should be automatically reduced to such circumstances that he would wish to use the assistance offered by the State. Surety, it would be better to allow these tax reliefs than to accept as a sort of general principle that everyone suffering disability of one kind or another should automatically become a pensioner on the State.
In principle, I could not see the logic of my hon. Friend's argument, and I should be grateful if he would be kind enough to explain why those who are blind who can earn their living or those who are disabled who can earn a living should suffer a tax disability because they are able to earn their living and should be made to want to fall back on the State social services. It seems to me to be a way of inviting the State to pay more out to these people than they could get by earning a living on their own.
I find particularly nauseating, if I may say so, the idea that a person who is either blind or disabled who wants to get to work by car should not have some tax relief to help him in getting to and

from work. I cannot see why, in this particular instance, the average disabled person who can earn a living—a good job that he can—should not be one of those allowed to claim relief for Income Tax purposes rather than be a charge on the State.
I cannot understand the general principle which my hon. Friend suggested that almost all of those who are unfortunate enough to be in some way either disabled or blind should automatically want to go on the State for aid. All we are asking is that those who are competent and willing to earn their living should have tax relief. Nothing more and nothing less.

Mr. Percy Colliek: I should not have detained the Committee had it not been for what I regard, and what I hope the Committee will regard, as the shocking reply we have had from the Economic Secretary. The hon. Gentleman's distinguished father made a reputation soon after he came to the House because he took up a progressive attitude, so considered in those days, as compared with that of his colleagues sitting round him. I venture to suggest that, if the Economic Secretary reads his speeches later on, he will find little to be proud of in the one he made tonight. Some of us who had, perhaps, because of his forebears, thought that he might make his mark when he joined the Treasury have been bitterly disappointed at the way he has done nothing more; than re-read the Treasury's brief, and read it, if I may say so—I am sorry for the hon. Gentleman—not nearly so well as it was read last year.
What is the claim here? It is quite simple. I have always understood it to be a principle of our Income Tax law that Income Tax should have regard not only to a person's income but to the expenses to which he is put in getting that income. This is the whole principle of expense accounts and all the rest. A person is entitled under the Act to make certain deductions in arriving at his real income. The whole point behind the claim in new Clause No. 7 is that in the case of 100 per cent. disablement persons, there should be a remission of taxation of approximately, in round figures, £100 a year.
There is no hon. Member who is without knowledge of the position of disabled persons in his constituency. I hope that we shall find a few rebels on the benches opposite with us on this issue tonight. Every hon. Member who is knowledgeable about his constituents and his constituency must be aware that in every constituency there are 100 per cent. disabled constituents who have to meet what is to them a considerable expense. They have done all their training and the rest, and they have recovered in some degree from their disability, and when they start earning an income again in the labour market they inevitably have the problem of getting to and from the place at which they work. I know lots of them in London who, for that service, have either to depend upon the help of friends or to get a taxi. I know disabled people in London who pay 10s. daily for a taxi to take them to work because their disability prevents them from having the usual access to public transport and the like.
I ask every hon. Member on the benches opposite—because no one on this side needs converting—whether it is not perfectly proper that these disabled men should be allowed something like £00 a year to meet this increasing expenditure. Only a few weeks ago, the Government authorised London taxi drivers to increase fares by 25 per cent., which is a further burden. Is there anything more reasonable or right than that the 100 per cent. disabled should be helped in this way? Most of them were disabled either in war or in circumstances almost equivalent, perhaps, of industrial injury, with which we are all familiar. Who can stand up in the House of Commons and deny the right of these people to have their expenses—because expenses they are—taken into account in assessment for an allowance of this kind?
The Economic Secretary to the Treasury does himself no good by trying to argue from the Treasury brief with which we are harassed every year and saying that it cannot be done in the way we suggest and that it should be done in some mystical way—because it remains a mystery to me—by some other form of social services, which in this field are non-existent.
I am sorry to detain the Committee at this hour, but one must do so on an occasion like this. That is what the House of Commons is for. This matter was fully considered by the Royal Commission on the Taxation of Profits and Income, which examined Income Tax law and the whole subject in far greater detail than the Committee has the opportunity of doing tonight. After examining the matter in great detail and considering the alternatives, the Royal Commission said, at paragraph 202 of its Second Report:
Our general conclusion is that grave disability ought to be the subject of allowance. It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay.… What we are thinking of is a range of additional expense attendant upon the conduct of their normal life, not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code.
It still goes unrelieved despite the fact that we have made this appeal year after year on the Finance Bill, and never more eloquently than it was made last year by my hon. Friend the Member for Sowerby (Mr. Houghton).
11.15 p.m.
Why do not the Government do something about this? Why is not the Economic Secretary strong enough to tell the Treasury what to do? Does he not want to distinguish himself before the House and the country? Here is a chance to do it. Nothing could be more creditable to him than to tell the Treasury, "There is no question of cost in this." Everybody knows it. The Economic Secretary himself said so. This is not a matter of great cost to the country or the Treasury. There is virtually very little cost involved. But the relief would mean an enormous amount to 100 per cent. disabled people. If the Economic Secretary were as he ought to be, he should take a strong line over this. I hope he will before the debate finishes. I hope he will tell the Committee, "We will have another think about it." We have had no concession on the Finance Bill.

Mr. Callaghan: We had one on the last Clause.

Mr. Collick: My hon. Friend tells me that we had one on the last Clause. I am sorry. But apart from that, we have


had no great concession that means anything. But this means something to disabled men and women.
I hope that because of what has been said by the Royal Commission, and because those in touch with disabled people know what this means in human terms, the Economic Secretary will handle the matter in terms of humanity. He says that the Government wish to do it in some way by means of social services. Let him tell me what I am to tell the disabled men in London tomorrow about what they can do to meet the cost of their transport to and from work. Can he tell me "If an application is sent to a certain department, we will meet the cost"? But, so far, I know of no means by which the 100 per cent. disabled person can meet that situation. I hope that we shall get a concession on this.
I want only briefly to touch on the other pathetic case. It is an absolute scandal. I refer to the case of the working man who has a disabled wife, perhaps bedridden because of polio or an industrial accident. All must realise the additional expenses which the man must meet to get aid in the home. Apart from the isolated case where there are young dependent children, there can be certain forms of assistance where there are no young dependent children. But the help is not sufficient.
Why cannot we say in the Finance Bill, "Here is a £100 allowance"? I do not want to arouse bitterness, but when one thinks of the kind of things that are happening in connection with accounts for Income Tax purposes and realises what goes on—hon. Members opposite know what goes on much better than I do; I have only a fragmentary knowledge of it, but I have a little knowledge of what goes on—and what is got away with, is it beyond the Government even at this late hour in their life to offer at least to these deserving cases the £100 recommended by the Royal Commission? I ask the hon. Gentleman to have another think about this. Let him think in terms of humanity, take a stand as Economic Secretary and, on behalf of the Government, decide policy on this matter and not just let the gentlemen who advise him say what should be done on a vital matter of this kind.

Mr. Victor Goodhew: The hon. Member for Birkenhead (Mr. Collick) has made an impassioned plea and it would be wrong to assume that the humanities of life are considered by hon. Members opposite only. I somewhat resented the form of his attack on my hon. Friend the Economic Secretary. There is no one on this side of the Committee who is not just as familiar as the hon. Member is with the case he has put. What he has failed to do is even to try to assess in his mind the case put by my hon. Friend the Economic Secretary.
Even my hon. Friend the Member for The Wrekin (Mr. W. Yates) jumped on one phrase used by the Economic Secretary about social services. The point overlooked by him and by the hon. Member for Birkenhead is that the Economic Secretary pointed out quite clearly that it was very difficult to try to assess the difference between the inconvenience and the extra expenses caused to people totally disabled and those incurred by the chronically sick or those who suffer some other disability.
It must be within the knowledge of hon. Members on both sides of the Committee that there are people who are 100 per cent. disabled but who are still able to drive themselves and do a full-time job and are, therefore, able to manage quite comfortably, whereas there are others who are suffering from chronic sickness and are incapacitated to a much greater degree, perhaps, and who are every bit as deserving of our consideration.

Mr. R. J. Mellish: If a person is chronically sick how can he go to work?

Mr. Goodhew: There are people in different stages of sickness who are able to do a ceratin amount of work, though not as much as those 100 per cent. disabled. [Interruption.] Hon. Members opposite are trying deliberately to mislead the Committee on this. This should be considered from the point of view of individual cases and not by categorising. That is the case made by the Economic Secretary and I support it firmly.
I am perfectly prepared to support it as an individual on the basis that, if one is to consider concessions of this


sort, they should be assessed on individual cases and not on broad categorisations which do not have a definite regard to the case in point. I thoroughly support what my hon. Friend has said and I regret the intemperate attacks on him by hon. Members.

Mr. W. Yates: I hope that my hon. Friend the Economic Secretary will realise that what I said was no personal attack on him. I am sure that the Committee was only anxious to put to him the point of view that, although we naturally sympathise with those who cannot earn an income and whose circumstances, through the war, through blindness or other tragedies, require the help of the State, we believe that those who are able to earn an income and look after themselves should receive some help from the Treasury. That is the point I was advancing. If my hon. Friend the Member for St. Albans (Mr. Goodhew) thinks I made a mistake in this, then I apologise.

Mr. Mitchison: I am not rising to make another speech but surely we are to have a reply from the Government, particularly after the eloquent speech of my hon. Friend the Member for Birkenhead (Mr. Collick).

Mr. E. G. Willis: I am amazed at the arguments put forward by the hon. Member for St. Albans (Mr. Goodhew). As I understand it, he simply says that we must not help some people in need because we cannot help all people in need.

Mr. Goodhew: If the hon. Member had listened to me he would have known that I said that we should look at all cases and give help where it was needed most, but that I did not think it was needed most where people were simply 100 per cent. disabled—that is, not in all cases.

Mr. Willis: That is a most astonishing doctrine. It is surely an astounding thing for an hon Member to claim that we should not help some people because we cannot help others a little bit more. If the hon. Member is going into the Division Lobby to vote on the basis of what he has told the Committee tonight, then he should have put forward a new Clause of his own to cover all those people with whom he is concerned.
Of course we cannot cover all people. Hon. Members all know that there are always exceptions, cases of hardship, and so on. There are always anomalies, but for the hon. Member to have come along with the argument that he has just put forward is, in ordinary considerations of humanity, past my comprehension.
However, I did not rise in order to make a long speech but to ask if the Economic Secretary is not going to reply to that part of the debate which we have had since he spoke. I should like to ask the hon. Gentleman if he has any power to accept this new Clause and I do so because I see that the Chancellor himself is dodging about behind the Chair. Why does not the right hon. Gentleman come in himself and accept some responsibility? I think that the Economic Secretary is bound to reject us. I think that he has been given a brief to read. He has read it, and has given no answer to my hon. Friend the Member for Glasgow, Craig-ton (Mr. Millan) who, in a first-class speech, adduced a most logical argument to which the Economic Secretary did not apply himself at all. The hon. Gentleman had his brief prepared for him before the debate, but it is no answer to arguments adduced during the course of the debate for him to get up and merely tell hon. Members what is in his brief. He should never have attempted to answer this debate if he knew that he could not treat the Committee fairly.
I do not often take part in debates on the Finance Bill, but it so happens that I have a fairly large settlement of disabled men in my constituency. Apart from the ordinary number of disabled people, there is a very well-known disablement settlement in my own area, and I am in close touch with the problem about which we are speaking. I see it every week and, in fact, have a case before the Minister at the present time. It is the case of a man in precisely the position which has been mentioned tonight.
This man cannot get to work because he cannot afford to, and he is about to give up work. Yet he cannot get a car from the Government. Surely this man is deserving of some assistance? Do the Government want him simply to sit back and do nothing? I am talking of a man with a job who is anxious to carry on working and yet the Government are quite indifferent. Is the attitude really that the Government can do nothing at


all for this man? From what the Economic Secretary has said, I understand that they cannot. Yet, there must be many cases similar to this. Mine is not the only case, and I personally have known others where men have had to give up working because they simply could not afford to bear the costs involved in getting to work.
We are concerned tonight with one of the greatest tragedies which can befall any man who is disabled. He, particularly, gets some satisfaction from his work; he looks upon it as some sort of fulfilment in his life; being able to do something gives him pride, and makes life that little more worth living. Yet the Government say that they cannot help because there is somebody else farther down the road who, according to the Economic Secretary, is also in distress. That is the hon. Gentleman's argument—"Because there is also somebody else badly off we must not help you."

11.30 p.m.

Mr. Goodhew: The hon. Gentleman is constantly trying to misrepresent what I said. What I said was that there may be cases more deserving of help among the 80 per cent. disabled, people in much more difficult circumstances than some with 100 per cent. disability. This was the case of my hon. Friend. There may be a case for looking into the matter from the point of view of individuals. In the circumstances, I do not accept that the hon. Gentleman's argument for the 100 per cent. is the right one.

Mr. Willis: The hon. Gentleman has said only what he said before, that we must not do something for someone because there is somebody else. My attitude, and the attitude of those on this side of the Committee, is not that we should not do something for one person, but that we should seek to try to do it for them all. That is the answer to the hon. Gentleman—that we should seek to try to do it for the person about whom he has spoken, and that does not mean that we must not help other persons, too. The question the new Clause is about is not whether somebody is badly off, but whether these people need help. We have not to answer whether somebody else is badly off. We are answering the question, do these people

need help? On this side, we quite clearly think they do.
The hon. Gentleman said also that we should deal with it in some other way. If the hon. Gentleman had said at that Box, "We recognise this case, but we cannot accept the Clause, but we propose to do something else ", well and good, but he did not do that. Instead, he said "We recognise this case but cannot accept what you suggest, and we do not suggest anything else." That is what he said, and that is quite illogical and quite the wrong way to treat this matter.
I hope that we shall hear from the Minister again. I do not know whether he is able to say that he will accept the Clause, but I hope that he will for once take his courage in his hands, be a bit of a rebel, and say, "I will accept responsibility for accepting this new Clause."

Sir Douglas Glover: I do not suppose anybody can listen to or take part in a debate on a Clause designed to bring relief to totally disabled people and remain unmoved, but the Opposition, although quite rightly doing their job, have really put down this Clause knowing that it has not been very well thought out.—[HON. MEMBERS: "Oh."]—Allow me to make my speech and do not interrupt. Hon. Members opposite will then find that I am very much in agreement with them. They have proposed this all-embracing Clause. It is the duty and the right of the Opposition to raise a matter which requires looking at, to stir the public conscience and the conscience of Parliament.
This Clause deals with relief to totally disabled persons. I do not disagree with that sentiment at all, but I think that Parliament would be less than proficient if it did not take into account, if we are going to provide relief for totally disabled persons, that there is an equally strong case for providing relief for partially disabled persons—[Interruption.]—I wish that hon. Members opposite would not keep interrupting. If they do, I will lose the tenor of my speech. They will find that a great deal of what I have to say runs parallel and in sympathy with much of what they have been saying.
For instance, I have a case now of a poor chap who got polio in 1914 and who for 50 years has been wearing a caliper which goes up his leg to his seat, an iron bar jointed at the knee. He wears out a pair of trousers in three months. He thinks, and I agree with him, that the Income Tax laws should provide for a special allowance for him because of the fact that his trousers are always in holes whereas my trousers last three or four times as long as his.
This is a matter which requires a great deal of research and investigation, because in this prosperous society, very prosperous as a result of 13 years of Conservative Government, we have reached a stage when these cases should be investigated by the Treasury with a view to bringing in some system of allowances which will help not only the totally but the partially disabled, those whose earning capacity is reduced, whose joy of life is reduced. I have a great deal of sympathy with what the hon. Member for Birkenhead (Mr. Collick) said about disabled wives. The expenses of such a household are clearly higher than where there is no disabled wife.
The Opposition would have an apoplectic fit if the Government accepted the new Clause, because they know that this is a subject which needs an exhaustive inquiry into the implications and gradations of benefits and so on. I support those who have called for such an inquiry. The Royal Commission on the Taxation of Profits and Income recommended that there should be benefits for the totally disabled, but I want a wider inquiry dealing also with the partially disabled, with those in the community who do not enjoy the same happiness and joy of life which the average member of the community has.
I do not ask my hon. Friend to accept the new Clause tonight, but I ask him to consider this as an urgent problem. This is not something which would be expensive for the Treasury, but in a modern, prosperous society this is the sort of problem which should be considered with a view to dealing with it in another Finance Bill.

Mr. Callaghan: The Economic Secretary has now heard the views which have been expressed on this matter. Having read his brief, the question now arises whether, in the light

of the debate that has taken place, he and his hon. Friends on the Treasury Bench have formed different conclusions. There is clearly some feeling on this matter on both sides of the Committee, and I think that it would be for our convenience if the Economic Secretary told us that he will reconsider the new Clause and that he will bring further proposals before us during the Report stage.

Mr. Macmillan: I am sorry that I was a little slow in getting to my feet.
I cannot altogether agree with my hon. Friend the Member for Ormskirk (Sir D. Glover) that what is wrong with the new Clause is that it is too widely drawn. Certainly the argument is not, as the hon Member for Edinburgh, East (Mr. Willis) put it, that we should not help some people because we cannot help them all. Indeed, the hon. Gentleman himself pointed out that, as far as he was concerned, the object was to enable those who could not afford to keep at work to be treated in a way which would enable them to carry on.
The difficulty is that a fiscal system of help must operate fairly. It is not a question of direct benefits or of pensions—which, incidentally, have been increased repeatedly in all these cases during the period of the Conservative Government. It is not a question of refusing one form of direct help to some people because one has to help everyone. It is a question of using the fiscal system as a means of giving tax relief to some people who are incapacitated and find it difficult to work as opposed to others. The new Clause argues that tax relief should be given to those who are still able to earn because it is more expensive for them to go on doing so, and it relates that tax relief to one class of those people. I am sure that the Committee will agree that although one might be able to put up with anomalies in borderline cases in direct grants, it is even more necessary for the tax system to maintain fairness as between one taxpayer and another.
The greater part of the hon. Gentleman's argument was developed on the basis that a tax allowance of this sort was some sort of compensation for disability. I am sorry to have incurred the wrath of the hon. Member for Birkenhead (Mr. Collick), but this is not


so. My hon. Friend the Member for The Wrekin (Mr. W. Yates) treated it rather in that way, and the reason why his proposition was inaccurate was stated most clearly by my hon. Friend the Member for St. Albans (Mr. Goodhew).
The hon. Member for Birkenhead quoted a number of instances of totally disabled people, but those people are covered by war pensions and other forms of tax benefit. This form of tax relief pre-supposes that anyone who is to benefit from it has a taxable income over and above his pension or tax-free disability allowance. That is one reason why I suggest to the Committee that this is not a fair or equitable way of dealing with a major social problem. It is not, as the hon. and learned Member for Kettering (Mr. Mitchison) suggested, that it would lead to difficulties of administration or to difficulties of definition.

Mr. Mitchison: I said the opposite.

Mr. Macmillan: As the hon. and learned Gentleman said, there was no

logical objection to giving way on this in 1962 in regard to the blind, but it is equally true that to do so would lead to further anomalies. It is not a question of definition. The hon. Member is arguing that it is one anomaly which should be remedied, but the remedy that he puts forward could not but create worse anomalies in its turn. That is another reason for asking the Committee to reject the Clause.

It is not because of administrative inconvenience, but because the Government do not regard a tax relief of this nature as either a just or an efficient way of dealing with a major social problem that, despite the sincere and eloquent arguments put forward by hon. Members on both sides of the Committee, I must still recommend it to reject the Clause.

Question put, That the Clause be read a Second lime:—

The Committee divided: Ayes 108, Noes 152.

Division No. 103.]
AYES
[11.46 p.m.


Allaun, Frank (Salford, E.)
Hill, J. (Midlothian)
O'Malley, B. K.


Awbery, Stan (Bristol, Central)
Hilton, A. V.
Oram, A. E.


Barnett, Guy
Holman, Percy
Oswald, Thomas


Baxter, William (Stirlingshire, W.)
Holt, Arthur
Pentland, Norman


Bence, Cyril
Hooson, H. E.
Price, J. T. (We8thoughton)


Blackburn, F.
Houghton, Douglas
Probert, Arthur


Blyton, William
Howie, W.
Redhead, E. C.


Boston, T.
Hughes, Cledwyn (Anglesey)
Rees, Merlyn (Leeds, S.)


Bottomley, Rt. Hon. A. G.
Hughes, Hector (Aberdeen, N.)
Roberts, Goronwy (Caernarvon)


Bowden, Rt. Hn. H. W.(Leics, S. W.)
Hynd, John (Attercliffe)
Robertson, John (Paisley)


Bowen, Roderio (Cardigan)
Irvine, A. J. (Edge Hill)
Rodgers, W. T. (Stockton))


Callaghan, James
Jones, Dan (Burnley)
Rogers, G. H. R. (Kensington, N.)


Carmichael, Neil
Jones, Elwyn (West Ham, S.)
Ross, William


Cliffe, Michael
Jones, J. Idwal (Wrexham)
Short, Edward


Collick, Percy
Jones, T. W. (Merioneth)
Slater, Mrs. Harriet (Stoke, N.)


Craddook, George (Bradford, S.)
King, Dr. Horace
Slater, Joseph (Sedgefield)


Crossman, R. H. S.
Lawson, George
Small, William


Cullen, Mrs. Alice
Ledger, Ron
Smith, Ellis (Stoke, S.)


Dalyell, Tam
Lee, Miss Jennie (Cannock)
Springs, Leslie


Davies, G. Elfed (Rhondda, E.)
Lewis, Arthur (West Ham, N.)
Stewart, Michael (Fulham)


Davies, Harold (Leek)
Loughlin, Charles
Swingler, Stephen


Davies, Ifor (Gower)
Lubbock, Eric
Thomson, G. M. (Dundee, E.)


Dempsey, James
McBride, N.
Thorpe, Jeremy


Diamond, John
MacColl, James
Wai+nwright, Edwin


Dodds, Norman
MacDermot, Niall
Watkins, Tudor


Duffy, A. E. P. (Colne Valley)
Mclnnes, James



Evans, Albert
MacKenzie, J. G.
Weitzman, David


Fernyhough, E.
McLeavy, Frank
Wilkins, W. A.


Foot, Dingle (Ipswich)
MacPherson, Malcolm
Willey, Frederick


Fraser, Thomas (Hamilton)
Manuel, Archie
Willis, E. G. (Edinburgh, E.)


Galpern, Sir Myer
Mason, Roy
Winter bottom, R. E.


Gourlay, Harry
Mellish, R. J.
Woof, Robert


Grey, Charles
Mendelson, J. J.
Yates, Victor (Ladywood)


Griffiths, Rt. Hon. James (Lianelly)
Millan, Bruce



Hannan, William
Milne, Edward
TELLERS FOR THE AYES:


Harper, Joseph
Mitchison, G. R.
Mr. Charles A. Howell and


Hayman, F. H.
Noel-Baker, Francis (Swindon)
Mr. Whitlock.


Herbison, Miss Margaret
Noel-Baker, Rt. H n. Philip (Derby, S.)





NOES


Agnew, Sir Peter
Batsford, Brian
Biggs-Davison, John


Allason, James
Bidgood, John C,
Bingham, R. M.


Awdry, Daniel (Chippenham)
Biffen, John
Bishop, Sir Patrick




Black, Sir Cyril
Hiley, Joseph
Page, Graham (Crosby)


Bossom, Hon. Clive
Hill, J. E. B. (S. Norfolk)
Partridge, E.


Bourne-Arton, A.
Hobson, Rt. Hon. Sir John
Pearson, Frank (Clitheroe)


Box, Donald
Hogg, Rt. Hon. Quintin
Percival, Ian


Boyd-Carpenter, Rt. Hon. John
Holland, Philip
Pickthorn, Sir Kenneth


Boyle, Rt. Hon. Sir Edward
Hollingworth, John
Pounder, Rafton


Braine, Bernard
Hughes-Young, Michael
Powell, Rt. Hon. J. Enoch


Brewis, John
Hulbert, Sir Norman
Proudfoot, Wilfred


Busk, Antony
Hurd, Sir Anthony
Ramsden, Rt. Hon. James


Bullard, Denys
Hutchison, Michael Clark
Rawlinson, Rt. Hon. Sir Peter


Carr, Compton (Barons Court)
Iremonger, T. L.
Redmayne, Rt. Hon. Martin


Carr, Rt. Hon. Robert (Mitcham)
Irvine, Bryant Godman (Rye)
Rees, Hugh (Swansea, W.)


Chataway, Christopher
James, David
Renton, Rt. Hon. David


Clark, William (Nottingham, S.)
Johnson, Eric (Blackley)
Roots, William


Clarke, Brig. Terence (Portsmth, W.)
Johnson Smith, Geoffrey
Scott-Hopkins, James


Cleaver, Leonard
Kerr, Sir Hamilton
Shaw, M.


Cooke, Robert
Kirk, Peter
Smith, Dudley (Br'ntfd &amp; Chiswick)


Corfield, F. V.
Kitson, Timothy
Spearman, Sir Alexander


Crawley, Aidan
Langford-Holt, Sir John
Stainton, Keith


Curran, Charles
Leavey, J. A.
Steward, Harold (Stockport, S.)


Currie, G. B. H.
Legge-Bourke, Sir Harry
Stoddart-Scott, Col. Sir Malcolm


Dalkeith, Earl of
Lewis, Kenneth (Rutland)
Studholme, Sir Henry


d'Avigdor-Goldsmid, Sir Henry
Litchfield, Capt. John
Summers, Sir Spencer


Deedes, Rt. Hon. W. F.
Lloyd, Rt. Hon. Selwyn (Wirral)
Tapsell, Peter


Doughty, Charles
Loveys, Walter H.
Taylor, Frank (M'ch'st'r, Moss Side)


du Cann, Edward
Lucas, Sir Jocelyn
Taylor, Sir William (Bradford, N.)


Duncan, Sir James
Lucas-Tooth, Sir Hugh
Teeling, Sir William


Eden, Sir John
Mac Arthur, Ian
Temple, John M.


Elliot, Capt. Walter (Carshalton)
McLaren, Martin
Thomas, Sir Leslie (Canterbury)


Elliott, R. W. (Newc'tle-upon-Tyne, N.)
Maclay, Rt. Hon. John
Thompson, Sir Richard (Croydon, S.)


Errington, Sir Eric
Maomillan, Maurice (Halifax)
Touche, Rt. Hon. Sir Gordon


Farr, John
Maddan, Martin
Turner, Colin


Firnlay, Graeme
Maglnnis, John E.
Turton, Rt. Hon. R. H.


Fletcher-Cooke, Charles
Markham, Major Sir Frank
Vane, W. M. F.


Fraser, Ian (Plymouth, Sutton)
Marten, Neil
Walder, David


Gardner, Edward
Mathew, Robert (Honiton)
Walker, Peter


Gibson-Watt, David
Matthews, Gordon (Meriden)
Webster, David


Giles, Rear-Admiral Morgan
Maude, Angus (Stratford-on-Avon)
Wells, John (Maidstone)


Glover, Sir Douglas
Maudling, Rt. Hon. Reginald
Williams, Dudley (Exeter)


Goodhew, Victor
Mawby, Ray
Williams, Paul (Sunderland, S.)


Gower, Raymond
Maxwell-Hyslop, R. J.
Wilson, Geoffrey (Truro)


Green, Alan
Maydon, Lt.-Cmdr. S. L. C.
Wise, A. R.


Griffiths, Eldon (Bury St. Edmunds)
Mills, Stratton
Wolrige-Gordon, Patrick


Crosvenor, Lord Robert
Miscampbell, Norman
Woodhousc, C. M.


Gurden, Harold
Montgomery, Fergus
Woollam, John


Hamilton, Michael (Wellingborough)
More, Jasper (Ludlow)



Harrison, Col. Sir Harwood (Eye)
Morrison, Charles (Devizes)
TELLERS FOR THE NOES:


Harvey, John (Walthamstow, E.)
Morrison, John (Salisbury)
Mr. Chichester-Clark and Mr. Pym.


Hendry, Forbes
Osborn, John (Hallam)

The Chancellor of the Exchequer (Mr. Reginald Maudling): I beg to move,
That the Chairman do report Progress and ask leave to sit again.
The next group of Clauses raises a new and substantial point and I think it will be generally agreed that this would not be a convenient time to start discussing that matter. I am rather disappointed at the extent of the progress made today, although I agree that the matters we have been discussing are important. I had hoped that we would have got further. However, I move this Motion in the hope that we will return tomorrow even fresher and brighter and that we will make more progress than today.

Mr. Callaghan: I hope that the Chancellor will not take it as a personal affront when I say that the benches behind him soon emptied when he uttered his first sentence and moved to
report Progress.—[Interruption.]—Hon. Members opposite tell me to look at the benches behind me. That only goes to show that our communications are even better than the Chancellor's.
We are glad to accept this Motion. I would not regard today's progress as at all disappointing. Because of the result of a long debate the Government have promised a concession on Report. Thus our time has been well spent. We could have avoided a long, four-hour debate on one new Clause had the Chancellor been ready at the beginning with the statement which was made on his behalf at the end. Any waste of time that there may have been has been because of the Chancellor and not because of my hon. Friends.
I hope that there will be no suggestion that because we have made extraordinarily rapid progress so far we must necessarily maintain the same rate of


progress through the whole period. We have dealt with all the Amendments to the Finance Bill in two days and have spent one day on new Clauses, three days in all. Normally we reckon to spend eight days on the Finance Bill. I am not for a moment suggesting that it is necessary for us to spend eight days on this, but I see no reason why the Committee as a whole—and this applies to hon. Members on both sides—should have to stay here extraordinarily late. I see no reason why the current Finance Bill—which is obviously going to take much less time this year than any I recall during my 19 years in the House of Commons—should not be considered at a reasonable hour.
I trust that the usual channels will continue to flow clearly. In support of the interests of hon. Members on the back benches as well as those on the Front Benches on both sides, I hope that, as long as we continue to make such rapid progress as is being made, we will be able to get away at a reasonable and sensible time at the end of a day's work so that we may get to our homes for a night's sleep.
I can assure the Chancellor that my hon. Friends will continue to debate the Bill and the new Clauses in the way we have debated them so far, without wasting time, but pushing our points forward until we see that the Government are either in favour or not and, if we see that they are not in favour, we either acquiesce or take the matter to a Division.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.

Orders of the Day — SCHOOL BUILDING PROGRAMME, ILFORD

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

11.59 p.m.

Mr. T. L. Iremonger: My object tonight is to ask for priority in the major school building programme approved by my right hon. Friend's Ministry for one major project in the Borough of Ilford, which I represent, and which will next year be part of the London borough of Redbridge. My right hon. Friend will be already aware that the failure of Ilford to secure one single project in the school building programme up to the end of 1967–68—which means that it has not secured a place for four years running—has been a grievous shock to the council, as well as to the school governors, the teaching staff and the parents concerned.
I have considered personally the representations made to me with the greatest care. I have discussed this matter with the chairmen of the Essex County Council and the Ilford Borough Council education committees, and I have direct personal knowledge of all the buildings and all the neighbourhoods concerned. I recently made a visit with the borough education officer to two of the schools I shall mention, and I have discussed the whole problem with the chairman of the governors. I have come to the conclusion that I owe it to the borough to bring forcibly to the notice of my right hon. Friend a state of affairs which I am sure will cause him concern.
The urgent project that I want to commend to him is the new school on a new site for the Ilford County High School for Girls. This directly affects, as I shall explain, the following three secondary modern schools—the Gearies' Girls' School, in my division, which is now grossly overcrowded with 433 pupils, the Dane Girls' School, which is equally overcrowded with 301 pupils, the Dane Boys' School, overcrowded with 333 pupils, and, finally, the Girls' County High School itself, with 501 pupils. That makes a total of 1,597 pupils affected by this one scheme.
Inclusion of this one project in the building programme would have the following beneficial effects. It would


solve all the deficiency problems at the Ilford County High School for Girls—a grammar school. It would enable the Dane Girls' and the Gearies' Girls Schools to be amalgamated into one school in the building now occupied by The Girls' County High School, which is far superior to the ones in which they are now separately housed. By taking the girls out of the existing Dane building, it would enable the Dane boys to spread themselves into the whole Dane building and thus give an interim period for readjustment before they, too, would be housed in another new building.
I have mentioned in passing the gross overcrowding in the Dane school building. I have seen it myself, and I should like to convey to my right hon. Friend something of the reality of it. Although I am concentrating on this one project and illustrating the urgent necessity for it by reference to this one pair of schools in this one building. I hope that my right hon. Friend will be aware that there are other schools in the older parts of llford that are in a very similar plight, notably, the Downshall Secondary Modern Boys' and Girls' School and Gearies' Boys' Secondary Modern School.
I wish that my right hon. Friend would convey to the noble Lord an invitation to come down to see the two Dane schools in this one building. He would find it a moving experience, and I do not know whether he would be more inspired or more horrified. Let me preface my observations by this one quotation about the girls' school.
This school offers notable examples of the triumphing of spirit over matter, of vision over material difficulties. The building and site seriously cramp the school, and it is doubtful whether they can ever be made adequate to serve the purposes of secondary education.
The girls' school occupies the first and second floors of the building; the boys' school uses the ground floor. Agreeable decorations, beautiful arrangements of flowers and of children's paintings and the display of fine pictures give grace and dignity to the hall and the Headmistress' room, but cannot disguise the fact that almost every side of the work suffers from the inadequacy of the building.
This description of the school was written by H.M. Inspectors as long ago as 1957. One has it there from a source of impeccable reliability. And to my mind it is the triumph of spirit over the squalor of the building that is so poignant. The building is an old solid

school board building built before 1904. it shares with a primary school an island site the total area of which is under 2 acres. On this island site there are 296 secondary modern girls, 314 secondary modern boys, 330 juniors and 223 infants, a total of 1,163 children. The secondary school itself, with a total of 610 pupils, is on a piecse of land 0·72 acres in extent.
Consider the girls' school, for example. The main entrance to the school would be considered bleak and furtive for the back door of a Victorian workhouse. The walls inside are harsh brick and the floors of merciless concrete. The whole atmosphere is dank and dismal, no matter how ingeniously it may be painted up. But it is not so much the aesthetic as the practical inadequacies of his building and its surroundings which should concern us. Leaving aside the brutish awkwardness of the so-called playgrounds, which are no more than a few square yards of puddled tarmac, every single respect in which modern education has progressed creates insuperable problems in such an old and cramped building. It is adapted to the days of "reading and writing and' rithmetic taught to the tune of a hickory stick".
The one hall space has to serve for physical education as well as assembly, and all the gear has to be stowed somewhere somehow in passages and cubbyholes all over the school. Clothing is stowed in wire cages in passageways. The headmistress's study is partitioned off from this one common place, and the anteroom to it is occupied by the school secretary. Since this anteroom has also to be used as a sick bay, it is occupied by the three or four girls who may happen at any one time to be unwell at school and who are lying about under blankets on chairs arranged to make up some sort of bed.
When the girls change lessons, each class has to troop through other classrooms. Lessons have to be arranged so that nothing is done which requires concentration when one of the three other schools that share the site is using the playground. Music, which is a great feature of the life of the school, cannot be played out of earshot of the classrooms. The tiny rooms which serve for teaching the arts of home-making, cooking and sewing have also to be used for


school meals, so that the paraphernalia has to be cleared away and reassembled before and after each meal. The teaching of mathematics, which has made such huge strides recently, is cripplingly handicapped in the poky classrooms, with miniature desks and no space for drawing boards or proper-sized paper, let alone the kind of models which modern concepts of the teaching of mathematics require The science laboratories, and the technical workshops in the boys' school, are utterly inadequate. There is no space for a library separate from the holding of classes.
I am sure that my right hon. Friend knows very well what I mean. He has seen more schools than most people, and he has seen the best, too. He knows the standards which modern school buildings achieve
If the conditions for the girls are unsatisfactory, the conditions for the staff of 29 women teachers are indescribable. The staff room would be more what one would expect to find in the fo'c's'le of a windjammer in the 1860s than in a common room for professional people in the 1960s. This is very serious, because the staff who have made the school and known it and loved it for decades are the stayers, but new staff will not put up with this state of affairs. It seems terribly unfair that these people, who put up with so much and who have always had to make do and mend, should see no light at the end of the tunnel, when other teachers in Ilford and Outer Essex have such marvellous conditions in the splendid new schools which have been built.
I make no apology if what I have said sounds rather like a long whine and "bellyache". It is. It comes properly from me, and I do not think that it could, in all honesty, be otherwise. But I want to make clear that this complaining is totally unrepresentative of the patience, courage, resourcefulness and creative joy which makes this depressing place radiant with delight, happiness and constructive effort. In fact, it really is more than anything else because I could not bear to see these marvellous people getting the muddy end of the stick, when they are being so fine and brave, that I am raising this matter tonight. Also, it is becoming painfully invidious that there should be such disparity between the conditions of children who go to

older schools like this one, and like Gearies or Downshall, and those who, through the mere accident of geography, go to one of the many beautiful new schools in other parts of the borough.
I have tried to tell my right hon. Friend tonight some of the things that are in the hearts of the people whom he and I try to serve, but I do not want him to think that the Ilford Education Committee, or, for example, the governors of Dane School, or, least of all, the staff of this and other older schools in the borough, are truculent, intemperate or stupid, or unaware of his difficulties and those of the noble Lord—or, indeed, the difficulties of the Chancellor of the Exchequer. They know as well as anyone of the special problems of Essex because of the vast expansion of the population in that county and of the school population especially. They know as well as anyone the special priority which has been given to Essex in approvals of school building programmes
Also, they know perfectly well the facts of economic life. They realise well that every brick and every man hour which is used to build new schools is a brick and a man hour that cannot be used for building new hospitals, roads and houses. They realise that "Gouverner, c'est choisir", that one cannot have everything and there has to be a choice of what one has and where and when one has it. The people on whose behalf I am speaking are not party to any captious or carping criticism, and they are certainly not anxious to make party political capital out of the inevitable limitation of our resources, of which they are well aware. They are not unreasonable people. But they do feel that their genuine needs are being overlooked in the perspective of the undoubted needs of other parts of the county.
It is because I sympathise with them, and it is on their behalf, that I ask my right hon. Friend urgently to impress upon the noble Lord the needs of the borough of Ilford in future school-building programmes, especially in regard to the older schools in the borough which, although they can be made to serve a purpose, are really not up to the standards which we are now achieving in secondary


education in other parts of the borough and of the county.

12.13 a.m.

The Minister of State for Education and Science (Sir Edward Boyle): I should make it plain that I no longer am associated primarily with that part of the Department's work dealing with school building, although I do not want to run away from this subject tonight, because one of the last functions which I performed as Minister at the end of March and the beginning of April was, as it were, supervising the school building programmes for 1965–66 and 1966–67. I should not, however, be replying to this Adjournment debate tonight but for the fact that it was thought that my hon. Friend the Joint Under-Secretary would not be back from an engagement in time to speak. In fact, he was back in the House—I mention this for the sake of anyone who scrutinises the Division lists—but it had been arranged that I should reply to this debate. That explains my presence at the Box.
There are two main points that need to be considered in answer to the fair and temperate speech of my hon. Friend the Member for Ilford, North (Mr. Ire-monger), whose concern with the education service is well known to all parties in the House. The first question is whether we are, in general, devoting sufficient resources to educational investment and to school building; and secondly, whether, within that total, Essex is getting its fair share. A third question which I add is whether we are devoting sufficient resources to improvements. Those are three main questions to which I wish to address myself. Then, I will say something about the future, as my hon. Friend has asked me to do.
First, as to educational investment and school building, the figures are well known but I will repeat the overall figures. At the beginning of this Parliament, total educational building starts were at an annual figure of £90 million. By the end of this Parliament, we are planning for an annual total of educational building starts of £200 million a year. That is an unprecedented rate of increase in any Parliament. The Government's educational record can always be made to seem less encouraging if one takes one particular defect, as my hon.
Friend did. But I believe that this is a case where one must consider the Government's efforts over the whole field and not this one aspect of education.
In the case of school building, as is well known, we had at the beginning of this Parliament a £300 million programme over five years. That programme will have been considerably exceeded over the five years. But it was clear to me last year when planning the next phase that the rate of school building in recent years had not been adequate to the needs of new school places, movements in the population, and improvements. Therefore, I discussed with my colleagues, particularly my right hon. Friend the Chief Secretary, the level of school building in the next two or three years, and despite the very rapidly rising total of public investment, despite the many pressures for increased educational investment over the whole field, it was agreed as Government policy that school building starts in the year 1965–66 and the year 1966–67 should be raised to an annual figure of £80 million.
Within that total of £80 million I can tell my hon. Friend that Essex has for each of those years the second largest combined programme of any authority in the country. I have checked the figures, and, with the solitary exception of Lancashire, which has as many Parliamentary constituencies as the whole of Scotland, the Essex figure for building starts over the two years will be the largest programme of starts in the country. It will represent a very great increase on the figures for recent years.
Over the five years 1960–65 Essex had total starts of £13–3 millon. That is just under £2¾ million a year. The figure for 1964–65 was £1·6 million, distinctly below that average, as I recognised, and I received a deputation from Essex last year and was glad that it was possible the second time round to include one major replacement secondary project which Essex badly needs in the Halstead area
Coming to 1965–66 and 1966–67, for those two years Essex, which has been having over the past five years an average figure of just under £2¾ million, will have for 1965–66 starts of £3·9 million and for 1966–7 starts of £41 million. That is a quite unprecedented rate of increase in any part of the country. There is


literally no authority where there is so great an increase as that from £16 million to £41 million a year.
Furthermore about the total figures for Essex, I would ask my hon. Friend to consider the point, because it may be a useful one when one is discussing school building in any part of the country, that over the two years there will be altogether 77 new school building projects—37 for the first year and 40 for the second. There have been posters about the country recently saying that under the present Government we have been building altogether an average of 10 schools a week. It is fair to say that in Essex alone over the period 1965–67 we shall be starting two schools every three weeks, which seems to me quite a considerable rate of striking.
I would like to turn next to the question of replacements. When one looks at replacements for the country as a whole, the figure for 1965–66 will be about £30 million worth of pure replacements and improvements. That figure compares with the combined total of £30 million for replacements and improvements in 1963–64 and 1964–65, and about £23 million to £24 million will be on starts on secondary improvements, the remainder for primary.
I cannot state at the moment the full figure for 1966–67, because with one or two big authorities like the West Riding we have not settled—through no one's fault—the full details of their programmes, but it will again be about £30 million approximately in roughly the same proportions. I say this about Essex: it is true that the heavy pressure of new population and the very large amount of movement of population means that by far the greater part of the county's building programme will be for new schools for new populations. That is why Ilford projects have not got in for 1965–67. But it would not be right to say that Essex has "lost out" on improvements altogether.
I mentioned the fairly large project we were able to include on the second round, 1964–65. There will be three important direct improvement projects in Essex over the next two years. One of these, I think, is near the Ilford area, in the new London borough of Red-bridge—St. Barnabas County School at Woodford, with the completion of a

new building. In addition there are quite a large number of projects, some 13 more, totalling about £1·3 million, which will either replace parts of existing schools whose premises are incapable of expansion to cope with expected rises in numbers, will be projects to replace existing buildings that will be affected by road widening, or will be projects where the addition of extra accommodation will involve some major remodelling of existing premises.
If one considers these headings, Essex has 13 extra improvement projects in addition to the three direct improvement projects I mentioned. It would be impracticable for me to itemise the very large list of new primary and secondary schools even if one were to take, for example, the single year 1965–66. In that year alone there will be about 28 new primary schools. All these, in the long run, will help raise primary standards in the areas just as the very large list of secondaries will have the same effect. Incidentally, we are looking forward to the general rise in secondary standards that will accompany the rise in the school-leaving age. I cannot make a definite promise about a school for 1967–68. I have looked carefully at the details of all those schools in the Ilford area which have been submitted and which were not approved.
So much is made of the fraction of proposals that are approved in the Ministry, and so much was made last year of the difference between total proposals submitted and those approved, that I am justified in pointing out that on this occasion about two-thirds of the total list of Essex projects were approved. At the moment, when we have been considering programmes for 1965–66 and 1966–67, we have been looking of course at the programme for Essex as a whole.
We deal with county councils direct and not with boroughs which are not county boroughs. But, coming to 1967–68, by the time we "firm up" programmes for these areas the London Government Act will be in operation. We shall have the new borough groupings with which to deal directly and it will be the intention of the Department, both at Ministerial level and, I am sure, at official level, to consider singly and with the greatest care the projects that are put


in by the counties and the borough groupings ringing London.
I am sure that when we come to do so we shall try to hold the scales fairly between all the authorities in the area and it is fair to say that, while I cannot make a promise about a particular project, nevertheless when dividing up money for improvements we shall bear in mind carefully the position in each borough grouping and try to measure as fairly as possible the relative claims of each.
I should like my hon. Friend to realise therefore that when we come to take official decisions on the 1967–68 programmes we shall bear in mind the representations which he has made, and also take into account, one by one, the

special problems of the groups of boroughs surrounding London and which will come into being as separate educational authorities under the full operation of the London Government Act. The Government take very seriously the problem of the school building programmes, and as a Government we have an exceptional record.
I am sure my hon. Friend will agree that far from being an ill-favoured county, Essex has had a dramatic rise in the rate of its school building, a rise which has not been equalled and certainly not surpassed by any other county area since the war.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Twelve o'clock.